Dubai's Damac says no approach made so far on bid to go private

Developer's founder and chairman Hussain Sajwani is reportedly weighing up bid to buy out minority shareholders

Damac Properties slipped to a loss in the first quarter of 2020 despite higher revenue as it wrote down the value of development properties and trade receivables. Chris Whiteoak / The National

Dubai-based Damac Properties said it has not received any potential acquisition offer following a report that its founder and chairman, Hussain Sajwani, is exploring a bid to take the company private.

On Tuesday, Reuters reported that Mr Sajwani, who retains a 72.2 per cent stake in Damac Properties, had been weighing up a bid to take the company private following a sustained decline in its share price.

“We would like to clarify that the company has not received, to date, any requests from any party that includes the intention of the acquisition,” company secretary Magdy Elhusseiny said in a statement to the Dubai Financial Market, where its shares trade.

When contacted by The National, a spokesman for Damac reiterated the statement given by the company secretary to the DFM. Mr Sajwani's investment company, Dico Group, did not respond to a request for comment.

Damac Properties is one of Dubai’s largest privately-owned property companies, with more than 1,400 employees and a presence in six countries. As of March 31, it had about 4.4 million square metres of projects either in planning or in progress, according to a presentation document to investors accompanying its first quarter results.

The company declared a Dh106m loss for the period as it wrote down the value of its development properties by Dh130m and made further impairment provisions of Dh52.5m on trade receivables. Damac’s revenue, though, for the quarter rose 41 per cent year-on-year to Dh1.22bn.

Mr Sajwani said in a recent Bloomberg interview that he expects the Dubai real estate market (where most of its units are based) to recover in 2021 on the back of greater economic activity in the run-up to the emirate's Expo 2020 event, which was postponed to October 2021 due to the Covid-19 pandemic.

Damac Properties’ share price had dropped 83 per cent from its most recent peak of Dh4.04 in August 2017 to Dh0.69 at yesterday’s close. But it was up 9.5 per cent as of 1.24pm on Wednesday on the news of a potential bid.