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

Emaar Properties holds just over 79 percent of Emaar Development. The offer covers the remaining 20.84 percent, excluding shares held by Emaar Properties and its indirect wholly owned subsidiary Emirates Property Holdings. The offer is still subject to approval by Emaar Properties' board.

If completed, the deal would bring Dubai's largest master developer back under the full control of its parent, nine years after Emaar listed a fifth of the business. Estimates of the cost vary slightly. Emirates 24|7 put the stake's value at about Dh12.5 billion, while Bloomberg estimated the deal could cost up to Dh12.6 billion, according to The National. Gulf Business put the buyout at $3.43 billion. At Dh15 a share, the offer values the whole of Emaar Development at about Dh60 billion.

The filing did not say whether Emaar intends to delist Emaar Development from the Dubai Financial Market if the offer succeeds. It also did not give a timetable or explain how the purchase would be financed.

Emaar Development owns some of Dubai's best-known residential communities, including Dubai Hills Estate, Arabian Ranches, Emaar South and The Valley. Emaar sold 20 percent of the unit in November 2017, raising Dh4.82 billion. At the time it was the largest Dubai listing in three years. The shares were priced at Dh6.03 in that offering, so the new offer is roughly two and a half times the IPO price.

The subsidiary has been growing fast. Emaar Development's first-half profit rose 48 percent to Dh5.5 billion and revenue rose 34 percent to Dh13.3 billion, according to The National. Second-quarter profit rose 43.5 percent to Dh2.6 billion. Emaar Properties reported first-half net profit of Dh8.7 billion, up 22 percent, on revenue of nearly Dh24 billion.

Emaar has bought back a listed subsidiary before. In 2022 it absorbed Emaar Malls through a share swap that gave 0.51 Emaar Properties shares for each Emaar Malls share, and Emaar Malls was then delisted. In March 2022 Emaar's board also approved raising its stake in Emaar Development by up to three percentage points.

The shareholder base at the top of the group has also changed. In May, Dubai Holding became Emaar Properties' largest shareholder after buying a 22.27 percent stake from the Investment Corporation of Dubai.

The offer comes as Dubai's property market slows. Founder Mohamed Alabbar said in September that he expected the market to reach a "nice balance" next year despite a softening linked to the Iran war. The next step is the Emaar Properties board vote, which will decide whether the Dh15 proposal becomes a formal offer to minority shareholders.