'The board of directors of Bank Muscat by majority has decided to accept NBO's net worth as RO 97 million [$255.3 million] or as audited by the bank's [NBO's] statutory auditors and duly approved by the CBO [Central Bank of Oman], as at the end of December 31, 2004, whichever is lower,' said Bank Muscat's statement.

Under the original terms of the deal, Bank Muscat would have paid RO 100 million ($256.4 million) for NBO, but problems emerged over valuation of an asset on NBO's books and the target date for completion of the merger was put back from January to March (MEED 7:1:05).

Officials at both banks suggest that the takeover may still go ahead and say that a clearer picture will emerge in the coming weeks. In another twist, NBO issued a statement in late February denying reports that Dubai-based Shuaa Capitalwas negotiating with the Suhail Bahwan Groupto acquire Bahwan's 36 per cent stake in the bank. However, banking sources say informal approaches have been made.

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