Riyadh – Mubasher: The Saudi Investment Bank (SAIB) is planning to offer the stake it reacquired from J.P. Morgan International Finance Limited to current shareholders within an 18-month period, CEO Musaed Al Mineefi revealed.
The bank’s extraordinary general meeting (EGM) will determine the time frame for reoffering the repurchased shares, Al Mineefi told Al Arabiya News, noting that regulatory approvals usually do not take longer than 18 months.
On Sunday, SAIB signed an agreement to repurchase 56.2 million shares, representing a 7.49% stake, from J.P. Morgan International Finance Limited, a subsidiary of J.P. Morgan Chase.
https://english.mubasher.info/news/3303859/SAIB-rebuys-JP-Morgan-s-stake-for-SAR-759m
The deal amounted to SAR 759.3 million ($202.43 million), valuing SAIB’s share at SAR 13.50 each. The transaction is pending regulatory approvals for a period not exceeding a deadline of 30 September 2018, SAIB had said in a bourse filing.
The repurchase price is fair to shareholders as it is lower than the market and book value, the top official noted, adding that foreign investors do not buy shares at market price at the time of executing a deal. He explained that there were other factors in play when the purchase is carried out by a foreign investor.
Al Mineefi affirmed that SAIB’s financial solvency was strong at the present time.
Following the repurchase deal, SAIB stressed that it was not planning to reduce its capital but that it prefers to hold treasury stock, indicating that it may reissue the shares to shareholders at a later time.
SAIB last achieved a 4.73% year-on-year rise in profits to SAR 361.2 million ($96.30 million) in the first three months of 2018 from SAR 344.9 million ($91.95 million), on the back of higher operating income and net special commission income.
