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Yes Bank stake $5 billion sale: First Abu Dhabi Bank PJSC among potential buyers

Yes Bank stake $5 billion sale: First Abu Dhabi Bank PJSC among potential buyers

| @indiablooms | 10 Jul 2024, 11:01 pm

Mumbai: First Abu Dhabi Bank PJSC is among the potential buyers for a stake valued at approximately $5 billion in India's Yes Bank Ltd, Bloomberg reported citing sources familiar with the situation.

The Middle Eastern bank is considering a bid for up to a 51% stake in Yes Bank, though the sources requested anonymity due to the private nature of the discussions.

Preliminary interest in the stake sale has also emerged from Japan, including Mitsubishi UFJ Financial Group Inc. and Sumitomo Mitsui Financial Group Inc. However, the extent of their interest and whether they will proceed with a bid remains uncertain, the sources added.

Yes Bank shares have risen 16% this year, giving the Mumbai-based bank a market value of about $9.4 billion.

The deliberations are ongoing, and the size of the potential stake sale could change. The banks might also opt against pursuing a deal or explore other investment opportunities, the sources noted.

Yes Bank announced this week that it has not received any in-principle approval from the Reserve Bank of India for a 51% stake sale.

State Bank of India (SBI), which rescued Yes Bank four years ago during a bad loans crisis, has reduced its holding but remains the largest shareholder with a 24% stake.

The tenure of SBI’s chairman, Dinesh Khara, is set to end in August, which could delay any deal involving Yes Bank.

A government-appointed panel has recommended Challa Sreenivasulu Setty as his successor.

In India, share sales, mergers, acquisitions, and other dealmaking activities are on the rise as global investors look to capitalize on the country's rapid economic growth.

Middle Eastern banks, such as FAB, are exploring overseas expansion opportunities, targeting lenders in Turkey and Egypt, as well as Standard Chartered Plc.

Japan's largest banks are actively seeking deals to enhance their lending revenues and expand their investment banking operations. According to Bloomberg News, MUFG is considering acquiring a minority stake in HDFC Bank Ltd.'s consumer lending unit.

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