Emaar Properties has launched a voluntary cash offer for the shares of Emaar Development that it does not already own, at 15.00 dirhams a share, a step that would take the Dubai group's listed build to sell arm back under full ownership.
The offer was set out in a letter to Dubai Financial Market signed by Ahmad Thani Rashed Almatrooshi, Executive Director of the parent company. It covers up to 100 per cent of those shares not already held by the parent and by Emirates Property Holdings Limited, an indirect wholly owned subsidiary. The letter records that the offer is subject to the approval of the parent's board of directors.
The company measures the price against six reference points. It is a premium of 19.4 per cent to the closing price of 12.56 dirhams on 2 November, the last trading day before the board meeting was announced, 21.7 per cent to the one week volume weighted average of 12.32 dirhams, 18.6 per cent to the one month average of 12.65 dirhams and 15.7 per cent to the three month average of 12.97 dirhams. Measured against the closing price of 14.52 dirhams on 5 November the premium narrows to 3.3 per cent. The company also states a premium of 148.8 per cent to the 6.03 dirham subscription price set before the listing in 2017.
The offer document was published on 5 November and the offer opened the next day. It closes at 3pm United Arab Emirates time on 10 December, with the result due the following day and the unconditional date expected on or around 8 January, subject to extension. Payment falls due within three business days of that date. Emirates NBD Bank is lead receiving bank.
The premium table is where the terms are really argued. A 19.4 per cent premium to the pre announcement close is a conventional number for a minority buy in, but the 3.3 per cent premium to the close three days later shows how far the market had already moved by the time the document was published. Shareholders deciding in December are therefore pricing against a share that has largely absorbed the offer, which is the usual reason a buy in of this shape either clears early or drags towards an extension.
What has not been disclosed matters as much. Neither the exchange filing nor the investor relations page states a valuation for the listed arm, a cost for the outstanding stake or the percentage the parent already holds. Figures circulating in coverage, including a group valuation above sixteen billion dollars and a cost of roughly 12.6 billion dirhams for the remainder, are calculations made outside the company rather than disclosed terms, and the reported stake of just over 79 per cent appears in neither document.
