Commercial Bank of Qatar to buy 71% of Alternatifbank

DUBAI: Commercial Bank of Qatar CBQ) has agreed to buy a 70.8 percent stake in Turkish lender Alternatifbank, underscoring Gulf Arab lenders’ appetite to expand into Europe’s fastest growing economy.
CBQ, the Gulf state’s third-largest bank by market value, began talks in December with Alternatif’s parent Anadolu Holding for the purchase, seeking to extend its footprint outside the Gulf for the first time.
The deal is valued at $460 million based on Alternatif’s book value of $ 328 million at the end of December. The final price will be based on two times the Turkish lender’s book value as at June 30, 2013, CBQ said.
Gulf banks are keen to build a presence in Turkey, one of the world’s fastest-growing emerging markets, to diversify their regional presence amid growing competition at home.
With the Turkish regulator following a stringent policy on handing out banking licenses, acquisitions have been the preferred route for most interested parties.
Lebanon’s Audi Bank AUDI.BY became the first lender to obtain a Turkish banking license in more than a decade when it received regulatory approval last year.
Qatar National Bank is also interested in expanding into Turkey through acquisitions, though it has no firm targets, its chief financial officer said in January.
It bid for Denizbank last year but lost out to Russia’s Sberbank.
Denizbank was sold for around 1.3 times book value, lower than the multiple CBQ is paying for Alternatif, though that partly reflected the pressure on Denizbank’s owner, Dexia, to sell the business.
In April last year, Greek bank EFG Eurobank sold its Turkish arm to Kuwaiti group Burgan Bank in a $355 million deal.
“Qatar and Turkey continue to strengthen their relationship which will benefit the new partnership between Commercialbank and ABank enabling both banks to continue to grow and thrive,” said CBQ Chairman Abdullah Bin Khalifa Al-Attiyah.
Alternatifbank, which has a market value of $ 594 million, is 96 percent owned by Istanbul-based Anadolu Holding. Anadolu will retain a 25-percent stake in the bank, while CBQ will make an offer for the remaining publicly listed 4.2 percent stake.
Alternatif shares rose 6.5 percent on the Istanbul bourse following the announcement. The stock has risen 72 percent in the last three months in anticipation of the deal.
In the Gulf region, CBQ owns a near 35 percent stake in National Bank of Oman and 40 percent in United Arab Bank.
Recent interest from Qatari banks in Turkey comes as they look to diversify out of their home country’s narrow, gas-focused economy, coupled with a lack of potential acquisitions in the Gulf, Fitch Ratings said on Jan. 14.
Bankers are awaiting the announcement of a mandate for the sale of National Bank of Greece’s Turkish arm Finansbank, one of the most profitable banks in the country, despite the Greek lender saying it was in no rush to sell.
In the Alternatifbank deal, BofA Merrill advised CBQ and Societe Generale advised Alternatifbank, according to a banking source.