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| MCB inks Rs7.2bn deal to acquire RBS |
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Thursday, August 13, 2009
By our correspondent
KARACHI: MCB Bank has formally signed a share purchase agreement with The Royal Bank of Scotland (Pakistan), the Bank said on Wednesday in a notification to the Karachi Stock Exchange (KSE).
According to the agreement, MCB Bank will acquire 99.37 per cent ordinary share capital in RBS Pakistan (formerly, ABN Amro Pakistan Limited) from its major shareholder and sponsor ABN Amro Bank N.V. - a subsidiary of RBS Group plc.
“The acquisition is in-line with MCB’s strategy of expanding its service platform, strengthening its product offering and building on its expertise in transactional services. The proposed acquisition is, however, conditional upon necessary regulatory and other approvals,” notification added.
MCB will initially acquire 1,707,107,891 ordinary shares from RBS Pakistan at Rs4.22 per share - representing a 99.37 per cent stake. The total consideration to be paid will be Rs7.2 billion (approximately $87 million). In addition, MCB will make a tender offer for the remaining 0.63 per cent ordinary shares, which were not owned by the majority shareholder under the Listed Companies (Substantial Acquisitions of Voting Shares and Takeovers) Regulations, 2008. This tender offer will also be subject to the necessary regulatory and other approvals.
Based on RBS Pakistan’s December 31, 2008 audited book value, the purchase price represents an implied price to book value of 0.87x multiple, notification further said.
MCB will fund the transaction entirely through internally generated cash resources and the transaction is not contingent on any external fund raising, it added.
RBS Pakistan is a leading international bank in Pakistan with a branch network of over 75 branches in 24 cities, of which 30 serve the affluent retail customer segment and three are Islamic banking branches with over 90 ATMs. At December 31, 2008 RBS Pakistan had total assets of Rs108 billion.
As a result of this transaction, based on latest available pro-forma numbers, the total number of branches of combined MCB and acquired bank (RBS Pakistan) will increase to 1,139.
While the total consolidated deposits will increase to Rs413 billion and consolidated gross advances to Rs324 billion.
Commenting on the transaction MCB-Chairman, Mian Muhammad Mansha said in a press statement, “This is an important transaction for us as it strengthens our franchise in the key urban centres and broadens our product offering to our retail as well as corporate customers. We have also managed to add a large number of experienced professionals to our existing strong team. As a result of this transaction, I am confident that MCB’s position has been strengthened to deliver on our growth plans.”
Chairman-RBS Pakistan, Muhammad Aurangzeb said, “We are delighted to confirm today that we have successfully entered into a sale agreement with MCB for RBS Pakistan which comprises of retail, commercial, Islamic and onshore GBM and GTS businesses in Pakistan. MCB will be an excellent owner of the strong customer franchise we have established here in Pakistan.
I am particularly pleased that our staff and customers will become part of one of the leading banks in Pakistan with a long standing banking history of over sixty years and which has such clear ambitions to grow further in its home market as well as internationally.”
Bank of America Merrill Lynch and KASB Securities have advised MCB while Morgan Stanley has advised The Royal Bank of Scotland Group plc on the transaction.
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ISSN 1563-9479 
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