Gulf Times
22 July 2003

QNB joins consortium in top bid for Habib Bank

ISLAMABAD: The two most serious contenders for the privatisation of Pakistan’s Habib Bank Ltd are the consortium of Supreme Council and Qatar National Bank and the Aga Khan Fund, it has been learnt.

Some 19 buyers have conveyed their interest to the Privatisation Commission for the acquisition of the management stake in Habib Bank, insiders have said.

According to these well-informed sources the commission would keep the reserve price of Habib Bank, with the largest network of domestic and international branches and a domestic market share of nearly 19% in the banking system, at around $400m for acquisition of 51% shareholding.

This calculation is based on using the sale price of the United Bank Ltd (51% stake) as a benchmark. The UBL, with 9% market share, was sold for $200m last year.

These sources, however, cautioned that there could be a surprise front runner besides the two serious contenders once the investment banks, chartered accountants firms and fund managers who filed the expression of interest, reveal the names of their clients in the second phase - filing of statement of qualifications.

Some experts feel that in a low interest environment HBL sale price may drop, while others contend that the present low operational returns are only transient and a buyer would look at the long-term picture when assessing the bank’s value.

The HBL, having a network in 27 countries and branches in every nook and corner of Pakistan, enjoys a distinct edge over all the other banks in the country.

An interesting expression of interest is from UBL. The bank has expressed its interest in purchase of Habib Bank as well as Allied Bank.

So has Hussain Dawood. On behalf of Central Insurance he has filed for the HBL and as Dawood Bank (formerly Bank of Ceylon) for ABL. Prime Commercial Bank, with some non-resident Pakistanis, has also bid for HBL, and its own name for ABL.

Former prime minister Moeen Qureshi along with former minister of finance Shahid Javed Burki are also interested in buying the banks through the Emerging Market Partnership Fund from the US.

The 19 bidders who have filed their expressions of interest are:

Aga Khan Fund, Gulf Pak Refinery, Pak Kuwait Investment Company, UBL, JP Morgan (Pakistan), Central Insurance Company, Deloitte and Touche, Elixer Securities (Pakistan), Emerging Market Partnership (US), Marna (Pvt) Ltd, Konooz Al Watan (Saudi Arabia), Abraaj Capital (UAE), AMZ Securities, Forte Business Solution, Overseas Pakistanis C/o Prime Commercial Bank, Investec Group, Consortium Supreme Council and Qatar National Bank, Hussain Cotex Ltd and Consortium, and Allied Management Consultant (UAE). – Internews