MCB Bank Ltd (MCB) has announced it has accepted a bid from a consortium led by United Bank Ltd (UBL) for its 17.6% stake (30mn shares) in Khushhali Bank Ltd (KBL). The latter is the largest microfinance bank in Pakistan with geographical outreach extending to over 90 districts through 109 branches.
The stake sale is priced at ~PkR20.44/share which, going by MCB’s cost of PkR10/share, should lead to a small EPS gain of PkR0.27 for MCB. The deal prices KBL at PkR3.48bn.
The buying consortium includes UBL, ASN-NOVIB Microcredits, responAbility Global Microfinance Fund; Rural Impulse Fund II and ShoreCap. UBL’s current stake in KBL stands at 11.7%. Recall that in 1HCY11, the SBP had invited EOIs from strategic investors for transferring 79.2% stake in KBL alongside management control to a strategic investor.
Considering Telenor Pakistan acquired a 51% share in Tameer Microfinance Bank for ~PkR1bn in Nov’08 and launched branchless banking, we believe UBL is likely looking for synergies with its branchless banking operations (the Omni brand). Besides MCB, other major shareholders in KBL are NBP (23.5%) and ABL (11.7%) where it is as yet unclear whether these are divesting their stakes. Assuming they have divested at the same price, EPS impacts for both NBP and ABL would be PkR0.18/share.
Source: AKD Research - Off the Analyst's Desk dated 23 February 2012.
