Abu Dhabi Commercial Bank Investor Exits With $300 Million Sale

An investor in Abu Dhabi’s second-largest bank has sold its entire stake in the lender for about 1.1 billion dirhams ($300 million).

The undisclosed shareholder offered 164 million shares in Abu Dhabi Commercial Bank at 6.70 dirhams ($1.82) each, according to terms seen by Bloomberg. More bids were received than securities offered at that level.

The shares were offered at a 5.5% discount to the stock’s closing price of 7.09 dirhams. ADCB’s shares are up 14% for the year, less than half the 33% increase for the ADX General Index.

The stock has yet to recover from the slump caused by the pandemic and was also lagging behind the 31% gain for First Abu Dhabi Bank PJSC, the biggest lender in the United Arab Emirates.

Abu Dhabi Commercial Bank Investor Exits With $300 Million Sale

What Bloomberg Intelligence says:

“Organic growth is hard to achieve and the lender needs to invest to improve its competitiveness to take market share from others. Scaling up remains crucial to support weak revenue outlook at ADCB given a low-interest rate environment. So, ADCB is likely to focus on more consolidation opportunities.”
-- Edmond Christou, a financials analyst

Details:

  • Shares on offer: 164m shares, about 2.4% of market capitalization
  • Indicative price range was 6.5 dirhams to 6.8 dirhams

    • NOTE: ADCB shares closed down 5% at 7.09 dirhams
  • Structure: 100% secondary shares
  • Joint bookrunners: BofA Securities, Emirates NBD Capital

Expected Timetable:

  • Launch Date: June 16
  • Expected Pricing Date: June 17
  • Expected Settlement Date (T+2): June 21

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