KARACHI, Oct 17: Arif Habib Investment Management Limited is understood to have entered into a deal with Khadim Ali Shah Bukhari & Company Limited (KASB) to take over KASB Premier Fund — a closed-end fund listed at the stock exchanges.

Chairman Arif Habib confirmed to Dawn on Thursday that agreement had been finalized by his investment management company — which already manages two open end funds: Pakistan Income Fund (PIF) and Pakistan Stock Market Fund (PSM) — to acquire the mandatory 10 per cent Investment Advisory stake in this closed-end Fund. Another 45 per cent shares in the KASB Premier Fund would change hands between the nominees of the two groups.

Although Arif Habib declined to disclose the price per share paid for acquisition, sources close to the deal hinted that the transaction had possibly concluded at discount of around 15 per cent to the KASB Premier Fund’s Net Asset Value (NAV). With net assets of around Rs400 million (invested in shares and term finance certificates), the NAV per share works out to Rs10. The current market price is Rs7.50, which is ex-the 2002 dividend of 5 per cent per share approved by the shareholders at the annual general meeting on October 15.

Including Rs750 million of those of Pakistan Income Fund and the Pakistan Stock Fund, total funds under group management, following the addition of KASB Premier Fund would amount to Rs1.1 billion. The recently released accounts for the year ended June 30, 2002, showed KASB Premier Fund posting net profit of Rs20.4 million, with dividend income contributing a huge Rs33 million.

On June 30, 2002, three shareholders (other than associated company) in KASB Premier Fund were disclosed to be in control of more than 10 per cent shares: Suleiman Ahmed Al-Hoqani 33 per cent; Invest Capital & Securities 25 per cent and Allied Bank of Pakistan 12 per cent. Individuals held a total of 1.4 million of the 40 million shares, which came to just about 3.6 per cent.

The takeover arrangement, though still subject to the formal approval of the SECP and the consent of the KASB Premier Fund’s shareholders, invigorates the race between various groups to expand and consolidate in the country’s financial sector.

KASB — the brokerage firm — though letting go off the investment fund, had only days ago, ventured into an unchartered territory through the acquisition of the Platinum Commercial Bank. ABAMCO Limited — the only other investment management company that holds within its fold both the open-end and closed-end funds, recently acquired lot-A of ICP Mutual Funds through open bidding by the Privatization Commission. And the second lot of ICP Funds would now be up for sale, at which both ABAMCO Limited and Arif Habib Securities are the pre-qualified bidders, besides the third equally fierce contender: NIT.