KARACHI - The acquisition deal of Royal Bank of Scotland, Pakistan by MCB Bank Limited has been lapsed due to acquirers failure in seeking approval from the apex regulators within the given time frame-work set by both parties in their shares purchase agreement signed on 12th August 2009, MCB said on Friday. MCB through a notification issued simultaneously to Lahore, Islamabad and London Stock Exchanges and Security and Exchange Commission of Pakistan on Friday, said that the share purchase agreement inked between the Royal Bank of Scotland Group plc (RBSG) and MCB Bank for the acquisition of RBS, Pakistans local operations has ended as the said transaction, which was subject to necessary regulatory approvals, could not materialise by 31 December 2009. Spokesmen MCB and RBS Banks, Kafil Burney and Ali Abuzar Zaidi, while talking The Nation said that the management of both banks had already disseminated this information to KSE on Friday but the local bourse was remain closed the other day on account of strike called by religious and political parties to mourn Ashura mayhem. RBS official said his bank will announce this information formally on Saturday (today). It must be recalled that the RBSG during this year considered divestment of RBS-Pakistan as part of its global restructuring process. The MCB board in its meeting on August 8, 2009 gave approval to the proposed acquisition of RBS Pakistan, subject to regulatory approvals and signing of the share purchase agreement. The MCB Bank, after it obtained the formal approval of SBP, conducted due diligence of RBS and finalised a deal for the acquiring of shareholding in RBS-Pakistan Thereafter on August 12, 2009, MCB announced that it had reached an agreement in principle of 99.37 holding in RBS-Pakistan from RBGS (the transaction). The share purchase agreement with RBSG provided that if the necessary regulatory consents are not obtained and closing of transactions has not occurred by 31 December, 2009, then the SPA will lapse. Some of the regulatory approvals were not accepted therefore closing did not take place by the given date and accordingly the SPA stands elapsed in accordance with the terms thereof. MCB in its SPA further stated that it would pay Rs 7.20 billion (approximately $87 million) to seller for purchasing the said entity adding that it would make a tender offer for the remaining 0.63pc of ordinary shares not owned by the majority shareholder under the Listed Companies (Substantial Acquisitions of Voting Shares and Takeovers) Regulations, 2008. The tender offer would also be subjected to the necessary regulatory and other approvals. Bank of America Merrill Lynch and KASB Securities had advised MCB while Morgan Stanley had advised The Royal Bank of Scotland Group plc on the transaction. However, in November this year, the MCB Bank moved the Supreme Court of Pakistan against the State Bank of Pakistan for the latters refusal to grant regulatory approval to its acquisition of Royal Bank of Scotlands local operations. The central bank had withheld an NOC for the purchase of RBS shares by MCB Bank. It is interesting to note that the SBP did not raise any objection at the time of granting due diligence approval to MCB Bank, after which MCB Bank went into negotiations with the RBS management for the purchase of local operations. The SBP raised objection just after the two parties had finalised the deal. The MCB management had several correspondences with the central bank for the purpose of an NOC.