Himalayan Bank Breaks Off Merger With Nepal Investment Bank
January 16, 2022 | Investopaper
The merger process between Nepal Investment Bank and Himalayan Bank has broken-off eight months after the signing of the memorandum of understanding for the merger.
The general meeting of Himalayan Bank has rejected the special proposal of merger with Nepal Investment Bank. The bank’s 29th annual general meeting on Friday rejected the proposal. The proposal could not be passed due to a dispute between the shareholders over the merger. About 36 percent shareholders, including the Employees Provident Fund (EPF), were not satisfied with Due Diligence Audit (DDA) conducted by both the banks.
The DDA report had finalized the share swap ratio at 1:1. In an independent study conducted by EPF, the swap ratio was found at 1:0.78. This means that every 78 shares of Himalayan Bank was equal to 100 shares of Nepal Investment Bank. The board of directors of the fund has formally decided not to agree to the merger until the proposal is addressed.
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