Emirates NBD Announces Open Offer For 26% Stake In RBL Bank

Emirates NBD on Tuesday announced an open offer for 26% stake in RBL Bank, the Mumbai-headquartered private lender, according to an exchange filing.

The Dubai-based lender has made the offer with a price of Rs 280 per share, which allows it to acquire the stake for Rs 11,636 crore.

Notably, Emirates NBD, which is the second largest bank of Dubai, is set to acquire a total of 60% stake in RBL Bank for $3 billion. The stake will be mopped up through preferential allotment.

The preferential placement of shares is expected around 15 days after the open offer, according to details shared by RBL Bank's Chief Executive Officer R Subramaniakumar on Oct. 19.

Post the investment, RBL Bank's net worth will increase to Rs 42,000 crore, Subramaniakumar had said. The deal will conclude in April, and after that, RBL Bank will be a listed entity of Emirates NBD.

The merger requires approval from the Reserve Bank of India, the Securities Exchange Board of India, and the Competition Commission of India, he had said.

Post the fund infusion, the current management will continue at the top level, according to the CEO. The board structure will be in the ratio of 50:50, with around 50% independent directors.

RBL Bank, formerly known as The Ratnakar Bank Ltd, is a private sector lender established in 1943. Originally established as a regional bank in Maharashtra, RBL Bank became a private sector lender in 1970. It, however, remained a closely owned small lender, largely limited to Maharashtra.

The bank will continue hosting its current client base in the retail and medium, small and micro enterprises segments. Emirates NBD is expected to help in developing its cross-border financing and non-resident businesses through this transaction.

Emirates NBD was earlier considered keen on buying a controlling stake in IDBI Bank as part of the government’s effort to sell the lender. However, considering the large equity stake held by the government and Life Insurance Corporation of India in IDBI Bank, RBL Bank looked more enticing to the investor, sources had told NDTV Profit on Oct. 13.