Drake & Scull reaches five-month high on news of purchase
Shares of Drake & Scull International (DSI) reached a five-month high yesterday as the Dubai contractor confirmed plans to acquire a Saudi company as early as next week. A press conference is scheduled for Monday at Emirates Towers in Dubai, where DSI will announce the details of its purchase of a Saudi mechanical, electrical and plumbing company, said Khaldoun Tabari, the chief executive of DSI. He would not discuss details of the company being acquired or the size of the transaction.
DSI shares advanced 0.1 per cent to 98 fils, their highest since April 21. The stock was actively traded, with nearly 9 million shares changing hands, about three times the three-month average. On Wednesday, as traders tried to capitalise on rumours in the market, 30 million shares changed hands. The stock advanced 6 per cent on that day. "The market already knew this" deal was happening, said Saad al Chalabi, a trader at AlRamz Securities in Abu Dhabi.
DSI filed a statement with the Dubai Financial Market on September 30 stating it had signed a letter of intent for the acquisition of a Saudi mechanical, engineering and plumbing company but did not provide details. DSI also said it intended to complete the acquisition of a second Saudi company, a civil construction specialist, before the end of the year. In June, Mr Tabari said DSI would spend Dh700 million (US$190m) on two companies.
DSI has been looking to expand throughout the Gulf. The company's current project contracts are worth about Dh5.5 billion. It reported a net profit of Dh44m for the second quarter, slightly below analyst estimates, because of continued weakness in the construction sector.
Published: October 8, 2010 04:00 AM