Abu Dhabi Bank FGB Investor Said to Pull Deutsche-Led Sale

  • Deutsche Bank tried to sell $330 million stake for investor
  • Sale had already been priced and allocated to investors

A shareholder in First Gulf Bank PJSC, the Abu Dhabi-based bank part owned by the government and the Al Nahyan ruling family, canceled a share sale valued at about 1.2 billion dirhams ($330 million), according to people familiar with the matter. The shares surged the most in more than a decade.

The investor pulled the sale after it was priced and allocated to investors, the people said, asking not to be named because the details aren’t public. The share owner wanted to use the proceeds to pay off a margin loan -- a vehicle often backed by shares where the borrower agrees to pay extra if the collateral’s value declines, they said.

FGB’s shares surged 12 percent to 11.35 dirhams on Sunday, the biggest jump since May 2005. They have fallen 10 percent this year, compared with a decline of 9.2 percent in the Bloomberg GCC 200 Index, a measure of stocks in the Gulf region. The lender is announcing full-year results on Sunday.

"A share sale has been cancelled, which would have had no effect on the bank, but removes the potential overhang" of stock, Jaap Meijer, managing director of research at Arqaam Capital Ltd. said by e-mail, adding he expects no cut to the bank’s dividend.

First Gulf Bank paid a cash dividend of 86.7 fils a share and 15.4 percent stock as dividend for 2014, according to data compiled by Bloomberg.

Deutsche Bank AG was the sole bookrunner on the sale of 120.6 million shares, or about 2.7 percent of the lender, according to a term sheet obtained by Bloomberg News, which didn’t name the seller.

FGB’s top shareholder is the Mubadala Development Co., the United Arab Emirates government’s investment company, which owns more than 7 percent, according to data compiled by Bloomberg. Sheikh Tahnoon Bin Zayed Al Nahyan, the bank’s chairman, owns about 5.4 percent, according to the data. The company is the country’s third largest lender by assets.

A spokeswoman for Deutsche Bank declined to comment. A representative for FGB didn’t have an immediate comment.

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