Bankers said the deal could be worth $180 million.
"We intend to sell our 68 percent shareholding in the bank to a consortium led by Mr. Shaukat Tarin," Muhammad Rashid Zahir, Chief Executive of the Saudi Pak Industrial and Agricultural Investment Co., told Reuters.
He did not say who the others were in the consortium.
But banking sources said Bank Muscat, Actis Capital of the United Kingdon, and Nomura Securities of Japan were the most likely partners of Tarin, the chairman of the Karachi Stock Exchange (KSE).
The consortium is expected to pay up to 32 rupees a share for the bank, which would value a 68 percent stake at around $180 million, the sources said.
The buyer must apply to the State Bank of Pakistan for permission to conduct a due diligence of the bank, Zahir said.
Bankers involved in the deal said three other parties had bid for the Saudi-Pak Bank stake. They were Egyptian billionaire and Orascom Telecom chairman Naguib Sawiris, Commercial Bank of Kuwait and KASB Bank.
If the deal finalises at 32 rupees a share, the buyer would be paying a price about 3.2 times Saudi Pak Bank's net asset value as of March 31, 2007.
Britain's Standard Chartered, whose Standard Chartered Bank Ltd. is listed on the KSE, last year bought Union Bank for $487 million in the biggest deal in the sector so far, paying 5.6 times the net asset value.
Tarin was the president of Union Bank at the time of the deal.
A strong performance by the national banking sector, coupled with financial reforms that have laid the platform for rapid growth and rising incomes, have attracted many foreign firms to Pakistan.
Though investments have been made in other sectors as well, most of the deals have involved banks.
Local banks' profits grew by around 49 percent in 2006, and analysts expect another 30-35 percent growth this year.
And since no new licences are being issued, except for Islamic banking, foreigners keen to enter the market must buy into existing players.
Apart from Standard Chartered, other buyers in recent years include Dutch bank ABN AMRO, NIB Bank Ltd., a subsidiary of Singapore state investor Temasek Holdings, and Saudi Arabia's Samba Financial Group.

Copyright Reuters, 2007