Emaar Development buyout sets December 10 deadline for shareholders

Dubai: Emaar Development shareholders have until December 10 to accept a Dh15-per-share cash buyout offer from Emaar Properties, which plans to compulsorily acquire the remaining shares if its ownership reaches 90% plus one share.

The offer opened on November 6, according to a shareholder FAQ outlining the transaction’s timetable and acceptance procedures. It closes at 3pm UAE time on December 10, unless extended by another 14 days.

Emaar Properties, which holds 80.1613% of the developer directly and indirectly, has no minimum acceptance requirement for the offer. It intends to purchase all shares validly tendered, provided the other offer conditions are satisfied or waived, even if it falls short of the compulsory acquisition threshold.

The offer price represents a 19.4% premium to Emaar Development’s November 2 closing price of Dh12.56, the last trading day before publication of the board announcement. It is also 18.6% above the one-month volume-weighted average price and 15.7% above the three-month average as of that date.

What happens to remaining shareholders?

If Emaar Properties reaches the 90%-plus-one-share threshold by the end of the offer period, it intends to exercise its right to buy the remaining shares from investors who did not accept. The compulsory acquisition process is expected to begin within 60 days of the offer payment date.

Those shareholders would receive the same Dh15 per share, in the same form and on the same terms as investors who accepted the offer. Their payment would come later, when the compulsory acquisition process closes, under applicable regulatory and Dubai Financial Market procedures.

If the threshold is not reached, investors who decline the offer would retain their shares. The FAQ says a reduction in the shares available for public trading could make them harder to sell and potentially increase share-price volatility.

The document also says there is no guarantee of another offer, or that any future bid would match or exceed the current price. The acquisition can proceed below the compulsory purchase threshold, subject to its remaining conditions.

Acceptance cannot be withdrawn

Shareholders can offer all or part of their holdings, but cannot withdraw an acceptance once submitted. Submitting the form also authorises Emirates NBD, the lead receiving bank, and Dubai Central Securities Depository to block the relevant shares, preventing further trading in them.

Investors holding shares through a broker must arrange for the shares they wish to tender to move into their Dubai CSD depository account. Those whose shares are held through a custodian must instruct that custodian to accept on their behalf.

Any pledge over shares submitted under the offer must be released no later than the business day before the closing date. Investors can submit more than one acceptance form, provided each relates to different shares.

When shareholders will be paid

The offer is expected to become unconditional within one month of its closing date, with payment due within three business days after that. Dubai CSD will process the proceeds into the bank account or iVestor card linked to each shareholder’s investor number.

Applications can be submitted through Emirates NBD’s dedicated offer website or at its participating Jumeirah branch in Dubai and Khalifa branch in Abu Dhabi. Branches accept applications until 1pm Monday to Thursday and 11am on Fridays, earlier than the online closing deadline.