Abu Dhabi sovereign fund L'imad is making a bid to acquire 100 per cent shares of AD Ports Group which it already does not own as it looks to expand its ports and logistics portfolio.
L'imad intends to make a voluntary conditional cash offer for the entire share capital of the AD Ports Group through its wholly owned subsidiary ADQ, the sovereign investment arm of the Abu Dhabi government said on Monday.
L'imad through ADQ currently owns 75.42 per cent of AD Ports Group's shares.
The offer price of Dh6.25 ($1.70) per share represents a 23 per cent premium over the last closing price of Dh5.10 on the Abu Dhabi Securities Exchange, where AD Ports Group shares are traded, valuing the company at Dh31.8 billion.
The offer is 25 per cent and 31 per cent higher than the one-month and three-month volume weighted average price of Dh5.02 and Dh4.76, respectively, L'imad said.
ADQ's offer to investors is 95 per cent higher than the Dh3.20 per share initial public offering subscription price ahead of AD Ports Group's listing on the ADX in February 2022.
“The offer gives AD Ports Group shareholders an attractive opportunity to realise certain and immediate value,” L'imad said.
In a separate bourse filing, AD Ports Group said it has received ADQ’s notification for its intention to submit a voluntary conditional cash offer.
“This matter will be presented to the group's board of directors,” AD Ports said, adding that further announcements will follow if there are “any material developments”.
The transaction, which is subject to regulatory approvals, will allow AD Ports to pursue long-term objectives, including investments and acquisitions, more effectively, without the funding constraints or short-term return expectations of public markets, the statement said.
Rothschild is acting as financial adviser for the tender offer. Emirates NBD Capital and First Abu Dhabi Bank are acting as joint lead managers, while EFG Hermes is the co-lead manager on the transaction.
Vital diversifier
AD Ports, the operator of industrial cities and free zones in the UAE and about 50 other markets across the globe, has rapidly grown its portfolio of terminals to 40. The company is a strategic asset central to Abu Dhabi's economic diversification agenda.
AD Ports, which reported an 86 per cent annual rise in its second-quarter net profit, also played a vital role in maintaining the UAE trade flows despite the effective closure of the Strait of Hormuz amid the Iran war.
The company has diversified its trade routes away from the narrow waterway blockade which has disrupted global shipping and logistics.
Continuity measures implemented since March include the rerouting of cargo operations and feeder services to Fujairah Terminals and Khor Fakkan Port, located outside the Strait of Hormuz on the Gulf of Oman.
The company also boosted its regional feeder shipping services, connecting to ports in India, Pakistan and Oman, as well as ports in the Red Sea along the Upper Arabian Gulf.
Strategic fit
AD Ports Group is a strategic fit for L'imad, Abu Dhabi's newest sovereign investor. The company, established last year, took over asset base of ADQ earlier this year and has since been expanding its portfolio of investments.
L'imad's portfolio spans energy and utilities, urban development solutions, ports, logistics, aviation and the industrial sector, as well as alternative investments.
In June, L'imad Holding acquired 2PointZero’s full stake in Taqa, acquiring nearly 9.1 billion additional shares in the power and water utility company. The deal, once approved, will result in L'imad owning 98.12 per cent of Taqa's issued share capital.
On the foreign investment front, in May, L'imad joined a team of global investors including Adnoc BlackRock’s Global Infrastructure Partners (GIP) and Singapore’s Temasek, to make infrastructure investments of $30 billion across the Gulf and Central Asia. The consortium plans to raise a combination of equity and debt capital to build an investment portfolio that will generate long-term returns.
Expansion push
AD Ports Group also has been on an investment spree in recent quarters.
In June, the company announced its largest acquisition yet, buying Corredor Logistica e Infraestrutura, an agri-bulk port terminal operator in Brazil, for an enterprise value of Dh3.1 billion.
The transaction, which marked AD Ports' entry into the South American market, is expected to close at the end of the third quarter of this year.
Also in June, AD Ports acquired an additional 30 per cent equity stake valued at Dh1.1 billion in Dubai-based Global Feeder Shipping, raising its total holding to 81 per cent.
The company this year purchased Germany's integrated logistics services provider MBS Logistics for Dh300 million to expand in freight-forwarding services area. The deal is expected to close in the fourth quarter.
AD Ports Group has also made an offer for a majority stake in Alexandria Container and Cargo Handling Company, which is now expected to close in the fourth quarter.
