Dh1.65bn cash offer for Damas on cards

Qatar's Mannai Corporation says it is considering making a cash offer for Damas, the jeweller in Dubai.

W A craftsman works on jewellery at the Damas factory in Dubai. Shares of Damas have surged more than 130 per cent recently. Pawan Singh / The National

Mannai Corporation of Qatar is weighing a cash offer for the Dubai jeweller Damas that would value the troubled retailer at nearly US$450 million (Dh1.65 billion).

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Mannai, a retailer that sells cars, home appliances and other goods, said it had secured commitments from shareholders representing more than 58 per cent of Damas, at a price of not less than 45 cents per share.

The announcement follows a move last week by Damas's founding Abdullah brothers who hired a financial adviser to sell some of their stake in the company.

In 2010, the three brothers were the subject of a disciplinary action by the Dubai International Financial Centre for withdrawing more than Dh600m of gold and cash from Damas without getting approval from shareholders.

The offer by Mannai is a 10 cent premium above the current share price and would value the company at about $445m.

Over the past month, shares of Damas have surged more than 130 per cent, to 35 cents, the highest in more than two years.

"Mannai confirms that it is considering the possibility of making a cash offer for Damas, which may be made in conjunction with one or more other investors," the company said yesterday.

But it also added a note of caution. "There can be no guarantee that any offer will ultimately be made for Damas, nor as to the terms on which any offer might be made."

Executives at Damas declined to comment on the potential bid.

"Whatever is happening is happening on the personal front of the Abdullah brothers, and DIL [Damas International Limited] is not involved at all," said Sanjay Kalsi, the chief financial officer for Damas.

Mannai noted yesterday that the share commitments it received "remain binding on the relevant shareholders even if a third party announces a firm intention to make an offer for Damas at a price above [45 cents] per Damas share.

"A further announcement will be made in due course," Mannai added.

In 2010, the Dubai Financial Services Authority, which regulates companies listed on the Nasdaq Dubai, began an investigation into Damas after the brothers withdrew funds without approval. It then fined Damas Dh13.5m and dismissed its board.

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