The Pearl in Qatar is a curious place, an artificial island marina where Ferrari and Rolls-Royce dealerships nestle among faux-Venetian canals, somewhat at odds with the rest of Doha.
But intriguing developments are taking place at United Development Company (UDC), the island's master developer, after a planned 1.6 billion Qatari rial investment by a government agency collapsed this week.
UDC's shares fell the most in two weeks after it was revealed that Qatar's General Retirement and Social Insurance Authority had withdrawn an offer to become the largest stakeholder in the company. UDC's shares fell 4.2 per cent to 24.7 rials each, having fallen as low as 8.2 per cent earlier in the day.
The move is "strange and surprising", UDC said in a statement to the Qatar Exchange.
It came only days after the company said it would vote at an extraordinary general assembly on whether to accept the General Retirement and Social Insurance Authority as a strategic shareholder.
Qatari investors did not like the deal when it was announced, which despite offering a "premium" of 10 rials on the target value, still fell below the trading value of the shares at the time. UDC's shares plunged 10 per cent after the deal was announced last month.
But the deal collapsed after the bidder demanded to complete the bid before the distribution of bonus shares - effectively picking up 32 million new shares on the cheap. UDC's board protested, and the deal fell apart, according to sources close to the company.
The move also comes only weeks after the resignation of Khalil Sholy as the managing director and president of UDC - whose stepping down followed a blowout year for the company, with profits of 3.7bn rials last year, more than seven times those of 2010, after handing over much of the development to new buyers.
