DUBAI, June 7 (Reuters) – A bid by Qatari investors to buy a 25 percent stake in Ahli United Bank (AUB) AUBB.BH (AUBK.KW), Bahrain’s biggest lender, has been delayed by up to three months on price negotiations, a source familiar with the matter said.
The group of up to five private investors from Qatar think the $1.3 billion price tag for the stake is high, the source told Reuters on Monday.
“The process has slowed down because people understand the price is not right,” he said. “The price is seen as quite high.”
Negotiations are ongoing and require two to three months in addition to the original deadline to reach a decision, after assessing the value of AUB’s books, he said.
The initial deadline to reach a decision was around June 12.
In April, AUB said Kuwaiti investment firm Tamdeen (TAMK.KW) and other unnamed shareholders had agreed to sell the stake in the Bahraini bank to an undisclosed buyer from the Gulf Arab region, in a deal estimated at about $1.3 billion. [ID:nLDE6350Y4]
No further details were disclosed by the bank since, raising questions about whether the deal would go through. Bahrain’s central bank said in April it was aware of the sale but did not know the identity of the buyer.
If approved, the deal would make the buyer the single largest shareholder in the bank.
The source said there were no other bidders involved.
He told Reuters earlier in April the investors plan to convert the lender into a wholly Islamic bank.
AUB’s Kuwaiti unit is being converted into bank compliant with Islamic law, or sharia.
Bankers see merger and acquisition activity in the Gulf Arab region recovering slightly in 2010, driven by sovereign wealth funds and companies restructuring in the wake of the global financial crisis.
Deals have slowed as capital dried up and a valuation gap between sellers and buyers appeared.
AUB’s Kuwait listing has fallen 27 percent since hitting a five-month high on April 7. The Bahrain listing has dropped by 25 percent over the same period.
Political tensions recently escalated between Bahrain and Qatar. Bahrain said Qatari coast guard shot and wounded on May 8 a Bahraini fisherman who had entered Qatari waters. (Additional reporting by Matt Smith; Editing by Louise Heavens)
Sponsored tweets no big deal, for now
Despite Twitter’s announcement that it will finally feature advertisements on its social networking service, several long-time users and commentators have shrugged off any major concern.
Questions had been raised over just how Twitter, a privately-held company which does not report its earnings, will generate revenue to satisfy its investors and justify a $1 billion price tag.
Media sites and a variety of blogs are concerned by the news that advertisers will be able to pay to give their tweets more prominence on search pages.
But with 75 million people using the service, this new advertising platform could be the answer to Twitter’s financial dilemma.
Some users are not impressed with the announcement. As peachymg tweets: “That utopic advertisement-free state in which Twitter has revelled, is now shrivelled. NOT looking forward to the bombardment!”
But Mark Pesce, a social media enthusiast and panellist on the ABC’s New Inventors program, is not too fussed.
“I’ve just seen a promoted tweet. Meh. Will I see any in TweetDeck? Not unless I do searches. Which I do only rarely,” he tweets.
But when it comes to tweets within his own feed, he is not so sure: “When that happens it’ll be annoying.”
JorgeLamen is not as scathing: “I’d prefer if they stayed out of my stream, although I suppose I’d learn to live with it if they were to start showing up in it”.
But the “promoted tweets”, as they are called, will only initially show up as sponsored search results similar to those found on Google.
Eventually they will find their way onto user feeds and will also feature on third-party clients such as TweetDeck and Twhirl.
Jason Wilson, lecturer in digital communications at the University of Wollongong and a regular Twitter user, says although he is not sure that promoted tweets are the definitive answer, Twitter certainly needed to address its lack of a clear business model.
“They had to think of some way to monetise what they’re doing and keep the platform going,” Dr Wilson said.
“The longer things went on without them having some kind of way to make this pay, I’d be more and more concerned that this service just wouldn’t be sustainable over the long-term.”
He says at the very least, he is happy Twitter is trying something to pay for itself.
“I think personally, as a user, I can cope with a sponsored search result when I search for Twitter,” he said.
“I think some people will initially be upset about it… rightly a lot of people see advertising as intrusive and compromising the nature of the services.
“As long as it’s not too intrusive, I think [Twitter] has got the balance right.”
Dr Wilson says that if Twitter continues to play a useful role in people’s lives, most users will not give up on the service.
But if companies soon find their way onto users’ feeds, some might not be as accepting.
Laurel Papworth, who tweets under the name SilkCharm, is an online communities strategist and has collected more than 20,000 followers on Twitter.
She is one of many who are concerned that sponsored tweets will be appearing as the top search result on Twitter pages.
“If they are contextually relevant [it] might be okay. But if they interrupt the flow, [it] could be an issue,” she tweets.
Time will tell just how prominently these promoted tweets will feature on user feeds. One question yet to be answered is just how advertisers will decide who to tweet to.
“At the moment it’s only in search… but later? Like an annoying younger brother – always eavesdropping and interrupting your conversation. Will have to be clever,” SilkCharm tweets.
“I don’t want Woolies offering me Tim Tams every time I tweet I want a cup of tea and a biscuit. Unless they are free…”