Abu Dhabi-based property development company Aldar Properties could acquire a majority stake in Egypt’s Sixth of October for Development and Investment Company (Sodic).
Aldar said in a stock exchange filing that the purchase price was in the range of 18 to 19 Egyptian pounds per share, valuing Sodic at $421 million at its mid-point. The bid represents a 14 percent premium over the previous week’s closing price.
The developer remarked that “Aldar believes that its offer represents a compelling liquidity event and value proposition for Sodic’s shareholders, reflecting the company’s robust fundamentals and share price performance over the last 12 months.”
Sodic, headquartered in Cairo, is one of Egypt’s largest real estate firms, having to book a record $10.3 billion in a sale last year and delivering 1,162 units, the company announced in January. Among its developments are the mixed-use Sodic Westown, Eastown, Kattameya Plaza, and Caesar schemes.
Recently, Sodic’s share price closed 4.7 percent higher at $23.7. According to the developer, Aldar’s offer is subject to due diligence and regulatory approvals.
“Following a satisfactory outcome of the due diligence process, the Aldar-led consortium intends to make a mandatory tender offer for the remaining shares”, the developer further added.
Aldar posted a 28 percent rise in fourth-quarter net profit to $198.5 million as revenue increased 19 percent to $0.68 billion last month.
Earlier this year, the developer revamped its business and implemented a new operating model, with a parent company managing its core growth and investment businesses. Aldar Development, which is responsible for developing the company’s 75 million square meter land bank, will be divided into three subsidiaries: Aldar Projects, Aldar Ventures, and Aldar Egypt, the company revealed earlier this year.
Aldar’s Chief Financial Officer Mr. Greg Fewer commented that “statement of intent from our side that Egypt is a particularly interesting market. We are spending a lot of time with our network, and opportunity is abundant” for Aldar to develop property in the country.
Aldar’s stock was trading at $1.01 per share, up 1.9 percent.