Merger: Arif Habib, MCB units ink deal
Board of directors, shareholdings decided.
KARACHI:
Arif Habib Investments Limited (AHI) and MCB Asset Management Company Limited (MCB AMC) have signed a shareholders’ agreement for the merger of both entities. AHI spokesperson Sarah Shaikh confirmed, “the agreement was signed on January 19.”
According to the terms of the deal, the combined entity will be named as MCB-Arif Habib Savings and Investments Limited, once clearance is received from the regulator. Being a listed company, AHI shall be the surviving entity at the formal completion of the merger.
The official also revealed that the paid-up capital of the merged entity will be twice as much as that of AHI at the moment – 72 million shares of Rs10 each. “Some 36 million shares will be held by MCB and a similar number by AHI shareholders,” Shaikh added.
Shareholders of MCB AMC will receive 1.2 shares of the combined entity for each share of MCB AMC while management control of the company will be shared equally by the managements of both parties. “Both the sponsors shall have an equal representation on the board of directors,” she said.
Shaikh also revealed that Mian Mohammad Mansha will be the chairman of the board with Nasim Beg as executive vice chairman and Yasir Qadri as chief executive officer of the merged entity.
Making economic sense
Speaking to The Express Tribune, AHI Chief Executive Nasim Beg weighed the advantages of the deal. “Usually we find smaller, weaker entities merging with stronger ones for their survival, but that is not the case here,” he asserted.
Beg believes that through the merger, the combined entity would not only double its asset base but it would also be able to establish branches to interact with existing and potential customers.
“Instead of setting up standalone branches, we can set up counters at those branches of MCB Bank that are located in areas where we can attract a good response from the market,” he explained. The combined entity will be the second largest fund in the country after National Investment Trust (NIT).
Published in The Express Tribune, January 21st, 2011.
Arif Habib Investments Limited (AHI) and MCB Asset Management Company Limited (MCB AMC) have signed a shareholders’ agreement for the merger of both entities. AHI spokesperson Sarah Shaikh confirmed, “the agreement was signed on January 19.”
According to the terms of the deal, the combined entity will be named as MCB-Arif Habib Savings and Investments Limited, once clearance is received from the regulator. Being a listed company, AHI shall be the surviving entity at the formal completion of the merger.
The official also revealed that the paid-up capital of the merged entity will be twice as much as that of AHI at the moment – 72 million shares of Rs10 each. “Some 36 million shares will be held by MCB and a similar number by AHI shareholders,” Shaikh added.
Shareholders of MCB AMC will receive 1.2 shares of the combined entity for each share of MCB AMC while management control of the company will be shared equally by the managements of both parties. “Both the sponsors shall have an equal representation on the board of directors,” she said.
Shaikh also revealed that Mian Mohammad Mansha will be the chairman of the board with Nasim Beg as executive vice chairman and Yasir Qadri as chief executive officer of the merged entity.
Making economic sense
Speaking to The Express Tribune, AHI Chief Executive Nasim Beg weighed the advantages of the deal. “Usually we find smaller, weaker entities merging with stronger ones for their survival, but that is not the case here,” he asserted.
Beg believes that through the merger, the combined entity would not only double its asset base but it would also be able to establish branches to interact with existing and potential customers.
“Instead of setting up standalone branches, we can set up counters at those branches of MCB Bank that are located in areas where we can attract a good response from the market,” he explained. The combined entity will be the second largest fund in the country after National Investment Trust (NIT).
Published in The Express Tribune, January 21st, 2011.