Jordan investors said to eye Arab Bank stake after Saudis drop out

A Jordanian consortium has stepped in to bid for Saudi Oger's 20 percent stake in Arab Bank Group after Saudi Arabia's Fawaz Al Hokair Group dropped its own $1.1 billion offer, Reuters reported, citing unnamed banking sources.

A deal appeared imminent between construction giant Saudi Oger and investors led by Arab Bank Group's chairman Sabih al Masri, a leading Jordanian businessman with extensive holdings in banking and hotels, sources added.

Saudi Oger began seeking buyers for the Jordan-based bank, one of the Arab world's largest privately owned banks, to help ease cash flow problems brought on by difficulties in the Saudi building sector.

The construction firm is owned by the family of Lebanese Prime Minister-designate Saad al-Hariri and the Arab Bank sale was expected to help it repay a $1.03 billion loan from regional and international banks due to mature in February.

"A transaction has been finalized. Sabih Masri has put together a Jordanian led deal to purchase the shares from Oger after the Al Hokair offer played itself out," one source told Reuters, adding that the valuation was based on the bank's share price.

According to the report, bankers claimed that the Al Hokair family's bid had been driven by the Arab Bank’s stock market value being well below its book value.

Arab Bank's shares closed at JOD 6.06 ($8.5) on Monday.

The banks' 40 percent stake in Saudi Arabia's Arab National Bank, was also a major attraction for the Al Hokair family group, the news agency said.

"Al Hokair is out for whatever reason and Sabih al Masri is in ... it's not a competition. The Jordanian group did not come in with a higher price. There is no bidding war," one of the sources said.

Another reason behind Jordanian interest could be to keep Arab Bank, which is considered a pillar of the country's economy, as Jordanian as possible, the report said.

"There has historically been a battle to keep the bank as Jordanian as possible. Whoever buys 20 percent and becomes the largest shareholder surely would influence it. This would have been alarming to the Jordanians," an unnamed senior financial source was quoted as saying.

The bank has assets of more than $46 billion, 600 branches on five continents and a reputation for withstanding political upheaval, the report added.