Talks for a possible takeover of Oman's United Finance by Al Omaniya Financial Services have broken down and will not progress any further, the two sides said on Monday.

The board of United Finance met on Sunday to discuss the proposal but decided that Al Omaniya had not made "an acceptable financially binding offer", according to a United Finance bourse filing which did not elaborate further.

In a separate bourse filing, Al Omaniya said it had submitted a non-binding bid which was subject to due diligence. United Finance then "insisted on a commercially binding offer before the due diligence", a condition which Al Omaniya did not want to accept and so talks ended.

United Finance has a market capitalisation of $113.8 million, according to Reuters data, while Al Omaniya's market value is $197.8 million.

Al Omaniya's was the final offer left on the table after an initial three-way battle among financial institutions in the sultanate for United Finance, which offers loans and leasing services as well as corporate deposits.

In May, United Finance invited National Bank of Oman, Bank Nizwa and Al Omaniya to participate in a bidding process. The other two institutions later decided not to bid, leaving Al Omaniya as the only potential purchaser.

Shares in both United Finance and Al Omaniya didn't trade on Monday as the main Muscat bourse was again buffeted by global market turbulence, closing 3 percent down. – Reuters