Emaar Offers Dh15 a Share to Take Full Control of Emaar Development

The proposed voluntary cash offer for the roughly 21 per cent of the listed unit Emaar Properties does not own could cost up to Dh12.6 billion, according to Bloomberg, and still needs board approval.

By Nakoda News Desk

2 days ago·2 min read

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Emaar Properties plans to offer Dh15 per share for the Emaar Development shares it does not already own.Photo: The National

Emaar Properties plans to make a voluntary cash offer of Dh15 ($4.08) per share for all the shares in its listed subsidiary Emaar Development that it does not already own, the Dubai developer said in a filing to the Dubai Financial Market on Wednesday.

The proposed offer needs approval from Emaar Properties' board, according to the filing, as reported by The National. It covers shares not held by Emaar Properties or its indirect wholly owned subsidiary Emirates Property Holdings. Emaar Properties owns just over 79 per cent of Emaar Development.

Emaar Development is valued at more than Dh60 billion at its current share price, and the deal could cost Emaar Properties as much as Dh12.6 billion, Bloomberg reported. The filing makes formal an approach that had been reported earlier in the week, when the parent was said to be weighing a buyout of the unit.

A Long Road to Full Ownership

Emaar raised Dh4.82 billion by selling a 20 per cent stake in Emaar Development in November 2017, which at the time was Dubai's largest listing in three years. It has moved to raise its holding before: in March 2022, its board approved a plan to increase the stake by up to three percentage points.

Emaar Development, which also trades on the DFM, is Emaar's build-to-sell residential arm in Dubai. Its projects include Dubai Hills Estate, Arabian Ranches, Emaar South and The Valley.

The parent company's own ownership has also changed this year. In May, Dubai Holding became Emaar Properties' largest shareholder after buying a 22.27 per cent stake from the Investment Corporation of Dubai.

Market Backdrop

The offer comes as Dubai deals with the economic effects of the Iran war, now in its ninth month. In September, Emaar founder Mohamed Alabbar said Dubai's property market was heading for a "nice balance" next year despite a softening caused by the conflict. In June, the company said it would unveil a Dh200 billion megaproject in Dubai that would house nearly 150,000 people. Emaar has 90,000 units under production in 18 markets, according to The National.

If completed, the deal would take one of the biggest companies on the Dubai Financial Market off the exchange, in a year when only one new company has listed so far. It would also give Emaar full control of the cash flows from its core Dubai development business. Minority shareholders will be watching the board decision and the final terms of the offer.