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Aabar Investments hikes buyout offer
ABU DHABI — Abu Dhabi’s Aabar Investments said it has agreed to raise a buyout offer to its existing shareholders to Dh1.95, 34 per cent higher than previously offered price of Dh1.45 a share, as the firm seeks to delist from the Abu Dhabi Securities Exchange to become a private company.
The Emirates Securities and Commodities Authority, or ESCA, said that “based on telephone conversations today [Sunday] with representatives” from Aabar and major shareholder International Petroleum Investment Co, or IPIC, “the companies have agreed to raise the offer price to Dh1.95”.
The ESCA led a government committee set up last week, which included representatives from the Ministry of Economy and Abu Dhabi’s Department of Economic Development, to study Aabar’s request to delist from the Abu Dhabi exchange via a buyout of shareholders by IPIC.
On Sunday, the regulator said the new offer will be valid from July 20 through to August 5, with payment to shareholders who choose to sell their shares due on August 10. Aabar will convene in an extraordinary general assembly meeting on August 15 to discuss the process for converting from a public stock company to a private stock one, the ESCA said.
The new offer values minority holdings at about Dh2.21 billion up from Dh1.64 billion.
The announcement from the ESCA sent Aabar’s share price up 9.7 per cent to Dh1.59, near the 10 perc ent limit on daily share movements, and drew criticism from an investment community already angry that the initial offer was so low.
“The timing has been unfortunate. The suggestion that Dh1.45 would be the trade price would have caused investors to sell around that level,” said Zahid Chowdhury of Al Mal Capital.
“The fact there are no clear rules and regulations for such events didn’t help anybody.”
Another investor said trading in the investment firm, whose holdings include about nine per cent of German carmaker Daimler and 4.99 per cent of Italian bank UniCredit, should have been halted after news on July 12 that the government panel would study the offer.
“Who will profit and who will lose and who will compensate [those] who had to sell last week between Dh1.42 and 1.45?” said Mohamed Ali Yasin, Chief Executive Officer of Shuaa Securities.
“If there’s going to be a change in price the shares should have been suspended until those discussions take place.”
The issue will reflect badly on the regulator “if this kind of haggling on price continues,” he told a newswire.
“I believe that the small investor got mostly hurt in this, and he is the one the regulator is trying to protect the most in this market, and that is not what happened here.”
Shareholders complained last week that the Dh1.45 price to buy out minority investors and delist Aabar was too low.
In Sunday’s announcement, SCA also asked Aabar and IPIC to change the offer period to run from July 20 until August 5. The original period was July 12-August 1.
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