largest transaction in history of Palestine Stock Exchange
The National Bank (TNB) announced that it has successfully acquired a majority stake in the Palestine Islamic Bank (PIB). The acquisition was executed through a buy-out vehicle led by TNB, purchasing 31.3 million shares or 45% of PIB, in a transaction valued at approximately $70 million.
Elaborating about the transaction details, TNB Chairman,Talal Nasereddin,said that the TNB-led vehicle, the National Islamic Investment Company,had purchased 22 million PIB shares owned by the Palestinian Investment Fund. In addition, a group of investors transferred their PIB stakes, totaling around 9 shares, to the TNB-led vehicle,thereby making TNB the major shareholder in PIB with a 45% stake. Nasereddin added that TNB will be appointing its representatives to PIB’s board at the upcoming general assembly meeting on April 16. The PIB transaction, executed on the Palestine Stock Exchange, was the largest in the history of the exchange.
Nasereddin went on to say that the acquisition will have a positive impact on TNB’s competitive ranking within the Palestinian financial sector, positioning it as the second largest indigenous Palestinian bank, while enhancing itsprofitability and product offering. Since its establishment, TNB has executed the largest number of mergers & acquisitions in the local banking sector, this one being the third since 2012.While the PIB transaction is a milestone for TNB, Nasereddin stressed the significance of such aconsolidation in strengthening the overall Palestinian banking sector and the knock-on effect it has in driving the national economy forward.
PIB will remain independent and will maintain its Islamic identity, continuing its operations in accordance with the Islamic Sharia, Nasereddin noted. He said that the key change will be to PIB’s shareholding base, which will, in addition to clients and employees, enjoy the same benefits, rights, and positions as before the buy-out.
Nasereddin emphasized on the potential revenue and cost synergies that are expected post acquisition, highlighting the positive impact of this transaction on the balance sheets of both TNB and PIB. Although both banks shall remain independent and in competition, they will become entities that are mutually supportive and strong. This will,in turn, reflect positively on customers, who will have a wider variety of comprehensive and diverse commercial and Islamic banking offerings to select from, achieving client satisfaction across all segments of society. The new banking group will also cover a wider geographic area, allowing for the launch of services in new markets, with a special focus on Gaza.
Nasereddin concluded his remarks by thanking the bank’s partners, the Palestine Monetary Authority and other regulatory authorities, for their integral role in contributing to the successful closure of this transaction.
For his part, Dr. Mohammad Mustafa, Chairman of the Palestinian Investment Fund, hailed this transaction as yet another successful exit by the Fund in line with its investment and return objectives. He said that Fund’s strategy seeks, in addition to achieving attractive returns on its investment portfolio, to develop the national economy through innovative investments and partnerships in cutting-edge, strategic projects.
Dr. Mustafa noted that the Fund’s investment in PIB, along with other portfolio investment companies, witnessed remarkable growth over the past eight years,as PIB became one the fastest growing banks in Palestine. PIB’s growth rate allowed the Fund to conclude the successful sale to a prominent investor group. Dr. Mustafa expressed his pride in closing this transaction with the consortium led by TNB.