By Santhosh V Perumal/Business Reporter

Masraf Al Rayan is inching closer to acquire Islamic Bank of Britain (IBB) as part of efforts to make inroads into the UK and continental European markets.
Both the lenders have reached an agreement on the terms of a recommended cash offer by Al Rayan (UK), a limited liability company incorporated in England and Wales and a wholly-owned subsidiary of Rayan, for the entire issued and to be issued share capital of IBB.
Rayan, with assets worth QR67bn as on September 30 this year, offered £24.1mn and each IBB shareholder will be entitled to receive 0.53 pence in cash for each IBB share, which IBB considered as “fair and reasonable”, according to the offer document by Rayan.
“The anticipated additional capital injections into IBB will result in significant dilution of minority shareholdings and shareholders are now being given the opportunity to exit by accepting the offer,” Sultan Choudhury, interim managing director of IBB, said in the offer document.
The acquisition would give Rayan the opportunity to introduce its already developed financial products into the UK and continental European markets and provide Rayan’s existing customers with additional services as they expand in the UK and Europe.
IBB offers Rayan the opportunity to invest in a financial institution with an established platform and with an existing client base of over 50,000 customers.
“As one of the leading banks in Qatar, we look forward to supporting the Islamic Bank of Britain in its growth plans by strengthening its balance sheet and position in the market,” according to Adel Mustafawi, Group CEO of Rayan.
Rayan said it could build a stronger bank that is more capable of exploiting enormous business opportunities available in the UK market for the benefit of its customers, shareholders, employees and the economies it operates in.
IBB will now be part of a fast growing group and will be a partner to an organisation with a clear focus on developing the business, Mustafawi said.
“The offer from Al Rayan (UK) will provide IBB with a new parent company with ambitious plans to grow the bank and inject significant amounts of additional capital to fund that growth,” Choudhury said.
Rayan first made the offer in October 2012 when the previous offer from IBB’s majority shareholder International Islamic lapsed.