Birmingham’s Islamic Bank set for £25.5m takeover

BIRMINGHAM based Islamic Bank of Britain is set to be bought out by its chief shareholder in a deal worth more than £25m.

Qatar International Islamic Bank (QIIB) said it had reached agreement on a recommended unconditional cash offer for the entire issued and to be issued share capital of the company not already held by QIIB.
 
IBB are being advised locally by Charles Cattaneo and Ian Stanway of Cattaneo, with Keri Rees and Steven Hacking of Eversheds providing legal advice.

Under the terms of the offer, shareholders will receive one penny for each IBB Share. The offer values IBB at £25,464,700.

The offer comes after QIIB, which already owns 80.95% of IBB, injected £20m into the bank last year in an attempt to stimulate growth.

Despite the bail-out, IBB said in its annual report that its financial performance for 2010 had “continued to be impacted by the challenging economic environment”.

Robert Owen, IBB chairman, said today that due to the bank’s difficulty in securing funds, the offer was in the best long-term interests of shareholders.

The offer represents a 70.4% discount to the closing price of 3.38p per IBB share on March 15 – the last business day prior to the announcement.
 
QIIB said it had received irrevocable undertakings from IBB directors Gerry Deegan and Sultan Choudhury to accept the offer in respect of their IBB Shares.

Commenting on the offer QIIB, HE Sheikh Dr Khalid Bin Thani Bin Abdullah Al Thani, said: “We are delighted to formally announce our firm intention to make an unconditional offer in cash, for the issued share capital of IBB that we do not already own.

“Our long-term strategy is to build an international Sharia-compliant banking business and we believe that our extensive experience in Sharia banking will allow us to develop and integrate the IBB business into the QIIB group.  We look forward to working closely with the existing management of the IBB business and to developing it in the long term.”

Mr Owen said: “The board believes that it will be difficult for IBB to achieve the necessary asset growth to achieve profitability and therefore the board welcomes the offer from QIIB which will provide all shareholders the opportunity to exit their shareholding should they so desire.”