DUBAI, June 9 (Reuters) - United Arab Emirates property
tycoon Hussain Sajwani made an offer on Wednesday to buy out
minority shareholders in DAMAC Properties, which he
has run for nearly two decades.
The all-cash offer comes amid a years-long slump in Dubai's
once hot property market, a decline exacerbated by the economic
hit from the COVID-19 pandemic.
DAMAC is best known for building the Middle East's only
Trump-brand golf course, which opened in Dubai in 2017 while
Donald Trump was U.S. president.
The deal confirms a Reuters report in 2020 that Sajwani was
considering buying out minority shareholders.
Sajwani, who resigned both as chairman and from the board,
made the offer through investment vehicle Maple Invest Co.
He directly and indirectly owns 72.215% of DAMAC, according
to the latest regulatory filing.
Maple is offering to buy out minority shareholders at
Tuesday's closing price of 1.30 dirhams per share, valuing the
offer at 2.185 billion dirhams ($595 million).
In an earlier filing Maple had said the ultimate offerer
directly and indirectly controls 88.106% of DAMAC, which would
make the value of the offer equal to $255 million.
It was not immediately clear why there was a difference in
the value of the deal in the two filings.
Maple Invest Co intends to increase the holding to at least
90% plus one so it can exercise its right to buy out the
remaining minority shareholders, it said in a statement.
DAMAC, listed in Dubai since 2015, would then be delisted.
The deal values DAMAC at $2.1 billion, at par with its
market value on Tuesday. Its shares were down 2.3% at 1.27
dirhams on Wednesday, below the buyout offer price.
S&P Global has a negative outlook on DAMAC's credit rating
due to the weak market recovery, S&P Globals property analyst
Sapna Jagtiani said.
Despite more transactions and slightly higher residential
property prices in the first quarter of 2021, Jagtiani said
prices for most real estate segments "will be constrained due to
this fundamental issue of oversupply."
DAMAC posted annual losses in 2019 and 2020, with Sajwani
warning last year of difficult years ahead.
DAMAC shares are flat so far this year, while shares of
Emaar Properties, Dubai's largest listed developer, are up 16%.
Since Sajwani set up DAMAC in 2002, it has built 33,000
homes and has 33,000 more under construction, its website says.
DAMAC's core business is Dubai property development but it
has also launched projects elsewhere in the Middle East and is
building the Nine Elms tower in London.
($1 = 3.6728 UAE dirham)
(Reporting by Alexander Cornwell and Saeed Azhar; Editing by
Jason Neely, Alexander Smith and Karishma Singh)