UPDATE 2-Kuwait's Boubyan Bank backs $2.1 bln NBK offer
* Protiviti to advise on Boubyan deal
* Boubyan, NBK shares fall
* NBK may buy disputed 19.2 pct stake from mkt - Arqaam (Adds NBK comments, analyst note)
By Dinesh Nair
DUBAI, June 20 (Reuters) - National Bank of Kuwait's planned takeover of Kuwait's Boubyan Bank moved a step closer on Wednesday, when the Islamic bank's board gave NBK its backing, leaving a disputed stake held by another bank as the main remaining obstacle to the $2.1 billion deal.
The Boubyan board described NBK's offer for the 52.7 percent stake it does not already own as "fair and suitable". However, NBK must still resolve the issue of a 19.2 percent stake held by Commercial Bank of Kuwait.
Investment Dar, a struggling Kuwaiti firm that is undergoing restructuring, sold the stake to CBK in 2008, with the right to buy it back. In 2009, CBK said Dar had lost that right and tried to sell on the open market, a move blocked by a Dar-requested court order.
"For NBK, its a matter of getting the CBK stake sorted out and gaining regulatory approval," a banking source said on Wednesday. "They have the support of Boubyan, so it's a done deal if these two things are taken care of."
NBK could acquire the stake from the stock market, Dubai-based Arqaam Capital wrote in a research note recommending shareholders to tender to the offer.
NBK, Kuwait's largest lender, last week offered to pay 630 fils per share for the 52.7 percent of Boubyan it does not own as it tries to boost its presence in Islamic banking in the Gulf region. If the tie-up is completed, the combined entity would hold assets worth about $57 billion.
In a separate statement on Wednesday, NBK said that the central bank's approval in April for it to increase its stake in Boubyan Bank to 60 percent has been extended by a further three months.
Boubyan has hired consulting firm Protiviti to advise on the transaction, it said in a bourse statement on Wednesday.
The bank's shares have risen 15 percent in the past three months on speculation of a full takeover by NBK. On Wednesday, the stock closed down by 1.6 percent at 620 fils on the Kuwait bourse. NBK shares dropped 1.9 percent. (Reporting by Dinesh Nair; Editing by David Goodman and Amran Abocar)
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