Al Madina, MB Holding to buy 60.5% stake in UAE takaful firm

Al Madina Takaful has received SCA’s approval for a 9.53% stake in Abu Dhabi-based National Takaful Co

Muscat - 

The UAE market regulator has cleared the purchase of a combined 60.53 per cent stake in Abu Dhabi-based National Takaful Co by Al Madina Takaful Co and a subsidiary of MB Holding Co.

Al Madina has received approval from the Securities and Commodities Authority (SCA) to buy a 9.53 per cent stake (14,303,596 shares) in Watania (as National Takaful Co is also known) for a total consideration of AED17.88mn, Al Madina Takaful said in a filing with the Muscat Securities Market (MSM) on Tuesday.

Al Madina's disclosure said that MB UAE Investments LLC, which is 100 per cent owned by the shareholders of MB Holding Co LLC, has also received approval for a 51 per cent stake in Watania.

“This is a strategic investment which Al Madina Insurance Co is planning to make along with MB Holding Co LLC,” Al Madina added.

MB Holding is also the largest shareholder in Al Madina Takaful with a 26 per cent of stake at the end of 2013, according to Al Madina's financials.

In a separate filing to the Abu Dhabi Securities Exchange on Tuesday, Watania said it has received a letter from the SCA that was addressed to MB UAE Investments LLC, which indicates its approval on the request to purchase a total of 90,803,596 shares, representing 60.53 per cent of Watania's paid-up capital. “This includes the acquisition of MB UAE Investments LLC of a 51 per cent stake of Watania's paid-up capital and Al Madina Insurance Co as a related group of a 9.53 per cent stake of Watania's paid-up capital,” the disclosure said.

It added, “This is to note that the expiry date of the purchase period is set at February 24, 2015.”

Watania, which started operations in 2011, offers general takaful products and services including medical takaful. It made a net profit of AED2.08mn for the six-month period ended June 30, 2014 as against a loss of AED6.96mn last year. Watania's total assets at the end of June 2014 amounted to AED319.48mn, the company's financial statement showed.

Subsequent to the announcement, Al Madina Takaful shares jumped 2.54 per cent in the MSM. Watania shares surged by 9.26 per cent in Abu Dhabi.

In a July filing to the Abu Dhabi bourse, Watania had said it was advised by a financial broker representing majority shareholders of the company that a biding agreement has been signed between them and strategic partners within the GCC to acquire a majority stake in the company.

Among Watania's major shareholders are Ajman Bank, Abu Dhabi National Insurance and Abu Dhabi National Islamic Finance holding 15.7 per cent each, while Qatar First Development Ltd holds a 10.3 per cent stake in the takaful operator.

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