ABU DHABI/DUBAI (Reuters) - Commercial Bank COMB.QA, Qatar’s third largest bank by assets, has agreed, in principle, to sell its 40 percent stake in Abu Dhabi-listed United Arab Bank UAB.AD to United Arab Emirates-based Tabarak Investment, sources told Reuters on Tuesday.
The sale will be finalised shortly with a formal announcement to be made next month, the sources said, declining to be named as the matter is not yet public.
Commercial Bank is exiting the UAE at a time when Qatar faces off against Saudi Arabia, United Arab Emirates, Bahrain and Egypt in a regional diplomatic and commercial rift.
Commercial Bank has said it is not being pressured to sell as a result of the row and is planning to re-invest the proceeds from the sale into its business in Qatar and Turkey, where it owns Alternatifbank.
The sources declined to say the deal value, but based on UAB’s current market capitalization, Commercial Bank’s 40 percent stake is worth 1.3 billion dirhams ($354 million).
Commercial Bank and privately-owned Tabarak entered into a 90-day period of exclusivity in September last year to negotiate the terms of the deal. That was extended in late December by 30 days.
“The parties have agreed in principle. An announcement on the signing of the deal could take place in March,” one source aware of the matter said.
The commercial terms have been agreed upon and the process of finalizing documentation is underway, a second source said, adding that the deal should be finalised by May or June.
Neither Commercial Bank nor UAB responded to a request for comment.
A spokesman for Tabarak said the deal “is not final yet,” declining to be more specific.
Tabarak, which calls itself a private equity vehicle, has a stake in Dubai’s Drake & Scull International (DSI.DU) and is invested in sectors such as education, industry, logistics and healthcare.
Reporting by Stanley Carvalho and Tom Arnold, editing by Louise Heavens