Aldar Properties, the biggest developer in Abu Dhabi, has received regulatory approval to bid with ADQ for a controlling stake in Egypt’s Sixth of October for Development and Investment Company (Sodic).
The consortium of Aldar and ADQ, one of the region’s biggest holding companies, is seeking to buy up to 90 per cent – and a minimum of 51 per cent – of the Egyptian developer's share capital through a mandatory tender offer.
The approval from Egypt’s Financial Regulatory Authority on Monday has initiated a “validity period” that gives Sodic shareholders 10 working days from Wednesday to respond to the all-cash mandatory offer, Aldar said in a statement to the Abu Dhabi Securities Exchange, where its shares are traded.
The consortium – in which Aldar and ADQ hold 70 per cent and 30 per cent, respectively – is offering a purchase price of 20 Egyptian pounds ($1.27) a share, valuing Sodic at 7.1 billion pounds. This represents a premium of 15 per cent over Sodic’s six-month volume-weighted average price of 17.40 pounds a share.
“The consortium believes that its final offer of 20 pounds per share represents a compelling liquidity event and value proposition for Sodic’s shareholders, reflecting the company’s robust fundamentals and brand equity,” Aldar said.
The acquisition of a majority stake in Sodic is part of Aldar’s overall expansion strategy, as it would have access to the “attractive Egyptian real estate market” where Aldar is assessing several opportunities, the Abu Dhabi developer said in September when it announced its offer.
Sodic, which has its headquarters in Cairo and is listed on the Egyptian Exchange, is one of Egypt’s leading property companies, with a number of residential, commercial and retail projects.
Aldar Properties, the developer behind Abu Dhabi's Formula One circuit and other big developments in the emirate, is looking to expand its footprint and asset portfolio.
The developer is also "actively" seeking acquisition opportunities in the UAE and is interested in expanding to other regional markets, including Saudi Arabia.
It is seeking an “attractive and value-accretive acquisition”, chief finance and sustainability officer Greg Fewer said earlier this month.
The company believes there are consolidation opportunities in the UAE, particularly in Abu Dhabi's property market, across the retail, commercial, office, residential, education, warehouse and logistics segments, Mr Fewer said.
"Those are the sectors where we see very interesting acquisitions both in Abu Dhabi and the UAE," he said at the time.
"Historically, we have shown a strong ability to make large transformational acquisitions and that has added a lot of value to our shareholders."
Aldar had Dh6.8bn ($1.85bn) in cash on its balance sheet at the end of September, which it intends to use to fund deals, he said.
