BankDhofar, Oman’s second-largest bank, has revised its proposed offer to acquire Ahli Bank. If successful, the merged lender would have assets of around $20bn.

BankDhofar’s original offer, submitted on 26 April, was rejected by Ahlibank.

Meantime, Oman International Development & Investment (Omnivest) proposed a rival offer for Ahlibank. Omnivest said that its offer involves a consortium comprising Omnivest, Arab Bank and other investors.

Omnivest and its consortium already hold a large stake in Oman Arab Bank.

If successful in its bid for Ahlibank, Omnivest proposed to merge the lender with Oman Arab Bank.

The Omnivest consortium cash offer is around OMR0.185 ($0.48) per share. That represents a premium of approximately 28% over Ahlibank’s one year market price of OMR0.144.

The revised BankDhofar offer implies a price of OMR0.2 for each Ahlibank share. The offer includes an alternative part-cash offer. That is up to 25% in cash at OMR0.2 per share with the balance in newly issued BankDhofar shares.

All cash Bank Dhofar offer valued at around 1.3x book value

According to BankDhofar, this is the equivalent of an offer worth OMR0.227 as per BankDhofar’s current share price.

The all-cash offer values Ahlibank shares at 1.30x book value.

Moreover, based on latest share price of BankDhofar, the part cash/shares swap ratio implies an offer of 1.48x book value.

Bank Dhofar operates a branch network of 75 outlets with assets of OMR4.62bn ($12bn).

It currently holds a market share in Oman of 12% for loans and 11% for deposits. First quarter net profit increased by 41% y-o-y to OMR10.0m. Bank Dhofar’s current market cap is around $1.38bn.

Bank consolidation in Oman is ongoing with HSBC Oman agreeing a deal last November with Sohar International Bank.

Regulatory approval was granted in February for Sohar to acquire HSBC’s Oman unit. HSBC has operated in Oman since 1948.

The deal is expected to complete in the second half of the year.