Emaar Properties plans to buy out Emaar Development for $3.3 billion — The National

In Dubai, Emaar Properties has approved a plan to buy back the shares of developer Emaar Development that it and its subsidiary EPHL do not yet own, for about 12 billion dirhams ($3.3 billion). After the deal is completed, Emaar Properties plans to delist Emaar Development from the Dubai Financial Market, The National reports.

Terms of the offer

Emaar Properties offered 15 dirhams for each Emaar Development share not owned by Emaar Properties and EPHL. This represents a 19.4% premium to the closing price of 12.56 dirhams on November 2, the last trading day before the announcement of the board meeting.

Emaar Development has 4 billion ordinary shares. Emaar Properties and its subsidiary EPHL own more than 3.2 billion of them, or nearly 81%. The remaining more than 793.5 million shares are valued at more than 11.9 billion dirhams under the offer. On Thursday, Emaar Development shares fell by about 0.4% to 14.52 dirhams.

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Consolidation of the development business

In a stock exchange filing, Emaar Properties said the offer was driven by “strategic considerations”. The company said that acquiring the remaining shares would enable it to fully integrate the UAE development business into the group structure and manage and finance it within a unified capital allocation system.

Emaar Development also reported third-quarter profit of 3.5 billion dirhams, nearly 8% higher than a year earlier. Its revenue rose 14% to 8.8 billion dirhams. UAE property sales for the first nine months amounted to 26.2 billion dirhams, while international sales of development projects totalled 8.5 billion dirhams.

Separately, Emaar Properties reported a 5.6% increase in net profit attributable to the company’s owners in the third quarter, to 4.6 billion dirhams. The company’s revenue for the three months to the end of September rose nearly 3% to 13.6 billion dirhams.