Aldar Properties, the UAE’s biggest listed developer, is looking to buy a majority stake in Egypt’s Sixth of October for Development and Investment Company (Sodic).
The Abu Dhabi-based developer is leading a consortium that submitted a non-binding offer of 18-19 Egyptian pounds per share, valuing Sodic at 6.6 billion Egyptian pounds ($421 million) at its mid-point, it said in a statement to the Abu Dhabi Securities Exchange, where its shares trade. The offer is a 14 per cent premium on last week's closing price.
“Aldar believes that its offer represents a compelling liquidity event and value proposition for Sodic’s shareholders, reflecting the company’s robust fundamentals and share price performance over the last 12 months,” the developer said.
Cairo-based Sodic is one of Egypt's top real estate companies, booking a record 7.4bn pounds in sales last year as it handed over 1,162 units, it said in January. Its developments include the mixed-use Sodic Westown, Eastown, Kattameya Plaza and Caesar schemes, among others.
Sodic's share price closed 4.7 per cent higher to 17.02 Egyptian pounds on Sunday. Aldar's offer is subject to due diligence and regulatory approvals, the developer said.
“Following a satisfactory outcome of the due diligence process, the Aldar-led consortium intends to make a mandatory tender offer [for the remaining shares].”
Aldar last month reported a 28 per cent increase in its fourth-quarter net profit to Dh729m ($198.5m) as revenue grew 19 per cent to Dh2.53bn.
The developer also revamped its business earlier this year and adopted a new operating model with a parent company overseeing its core development and investment businesses.
Aldar Development, which is responsible for building out the company's 75 million square metre land bank, will have three subsidiaries – Aldar Projects, Aldar Ventures and Aldar Egypt, it said earlier this year.
Aldar’s chief financial officer Greg Fewer said last month that the new Egyptian unit reflects a “statement of intent from our side that Egypt is a particularly interesting market".
“We are spending a lot of time with our network, and there is an abundance of opportunity” for Aldar to develop property in the country, he said during an online media briefing following publication of its annual results.
Aldar's shares were up 1.9 per cent at Dh3.72 per share.