In numbers … Details of the merger of Al-Ahly and Samba and the evaluation and swap process

Source: Dubai – Arabia.net

The National Commercial Bank announced that it had signed a binding merger agreement with Samba Group, according to which the two banks agreed to take the necessary steps to implement the merger deal between them.

Under the terms of the merger agreement, the merger will take place by merging the Samba Group into the National Bank and transferring all its assets and liabilities to the National Bank.

Upon the completion of the merger, the National Bank will continue to exist. As for the Samba Group, it will expire and cancel all its shares. The National Bank will issue new shares to the shareholders of the Samba Group. The reference to “the merging bank” in this announcement is a reference to the National Bank after the merger is completed.

Upon completion of the merger, the shareholders of Samba Group will acquire new shares in the National Bank according to the swap factor, according to which the shareholders of the Samba Group will acquire 0.739 shares in the National Bank for every share they own in the Samba Group “Swap Factor”.

Al-Awad shares will be issued by increasing the paid-up capital of the National Bank from 30 billion riyals to 44,780 billion riyals and increasing the number of its issued shares from 3 billion to 4,478 billion shares, which represents an increase of 49.3% in the current capital of the National Bank. Based on the swap factor and the closing price of the share, the Ahli Bank share amounted to 38.50 Saudi riyals as on the date of 10/8/2020, which is the last trading day prior to the date of publishing this announcement.

Evaluation process

The valuation of the Samba Group’s share price for merger purposes is 28.45 Saudi riyals, and the total value of the issued Samba Group shares is estimated at 55.7 billion riyals.

The above valuation represents an increase in the share price of Samba Group by 3.5% compared to the closing price of Samba Group’s share in the Saudi Stock Exchange (Tadawul) of 27.5 riyals as on 8/10/2020, the last trading day prior to the date of this announcement.

It also represents an increase in the share price of Samba Group by 23.7% compared to the closing price of Samba Group’s share of 23 riyals as on 6/24/2020 (which is the last trading day prior to the date of the two banks’ conclusion of the framework agreement).

The swap coefficient reflects a value representing 1.20 times the tangible book value of the Samba Group as on the date of 6/30/2020 AD, based on the swap factor and the closing price of the share of AlAhli Bank of 38.5 Saudi riyals as on 8/10/2020, which is the last trading day. This announcement precedes the date of publication.

Upon completion of the merger, the current shareholders of the National Bank will own 67.4% of the merging bank’s capital, and the Samba Group shareholders will own 32.6% of the merging bank’s capital.

Major shareholders of the new entity

The major shareholders in the merging bank will be the shareholders, the Public Investment Fund with an ownership rate of 37.2%, the Public Pension Agency with an ownership rate of 7.4%, and the General Organization for Social Insurance with an ownership ratio of 5.8%.

It should be noted that if the calculation of the shares due to any of the shareholders of the Samba Group resulted in fractions of shares, then it will be dealt with according to the mechanism that will be clarified in a circular that will be announced later to be published and the members of the Board of Directors of the National Bank believe that the terms and conditions of the merger are fair After receiving the advice of the company. B. Morgan Saudi Arabia as the financial advisor to the National Bank of Egypt in the matter of the merger, regarding the financial aspects of the merger.

GB Morgan Saudi Arabia, when providing this advice, took into consideration the commercial assessments of the National Bank of Directors in this regard.

Layoffs

It should be noted that there will be no direct change in the business of the two banks with regard to customers as a result of this announcement, as both banks will continue to operate their business independently and separately and as usual until the completion of the merger.

In addition, the National Bank does not expect that the merger will result in a compulsory layoff of employees, and it should be noted that the completion of the merger is not guaranteed as it is subject to several conditions and approvals from the collateral obtaining the statutory approvals in addition to obtaining the approval of the shareholders of the two banks on the merger.

The merger agreement also included specific cases for terminating the agreement and stopping the merger. Paragraph 3 of this announcement includes more details regarding the conditions for completing the merger and cases of termination.

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