Middle East’s buyout activity triples during October to $1,7bn

02 November 2010

National Bank of Kuwait’s $1.3bn rights issue was the largest deal

The value of mergers and acquisitions (M&A) in the Middle East tripled in October to $1.7bn from $548m in September, despite deal volume falling 56 per cent to 29 deals from 66.  

October’s deal value was the best result since June, while volume was at a 12-month low, according to a report published by Zephyr, the M&A database published by Belgium’s Bureau van Dijk (BvD).

The month’s biggest deal was a $1.3bn rights issue by National Bank of Kuwait (NBK), the country’s largest lender, in which it sold 720 million stocks in an issue that closed five times oversubscribed on 21 October. The 10 per cent rights issue was priced at KD0.5 per share and aimed to raise capital to KD360m ($1.3bn).

The money raised will be used to finance the $184m purchase of Kuwait’s property developer Al-Shaab National Real Estate Company, from Kuwait’s Securities House Real Estate Company and other shareholders.

This purchase was signed on 20 October and ranked as the second biggest deal by value.

Kuwait led the way in terms of total value of deals at $1.6bn, followed by the UAE with $60m, Jordan with $24m and Oman’s $1m.    

Deal activity was concentrated in five countries, with Jordan recording the highest volume at 22, followed by Kuwait with three, the UAE with two and Oman and Lebanon which both closed one deal.   

The value of deals is more than double the $769m recorded in October 2009 despite a 40 per cent drop in deal volume over the same period.

The value of mergers and acquisitions (M&A) in the Middle East fell to a 12-month low of $270m in July.

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