STOCK Damac properties
Damac's mintority shareholders will have 21 days and then some to make up their mind on the Dh2.2b offer to buy them out. Image Credit: Bloomberg

Dubai: In another 21 days, the Hussain Sajwani owned Maple Invest will inform Damac’s Board of Directors and shareholders the opening and closing date for its open-ended offer to acquire the 27.285 per cent not held by it.

Maple made the formal approach to Damac on June 9, a day after signaling its intention to acquire the balance stake. If all goes as per plan, Hussain Sajwani will own 100 per cent in the Dubai real estate developer he set up and then took to an IPO in 2013.

Why set at Dh1.3 a share?

According to Damac, the offer is based on the average price of Damac shares during the 3-month period preceding the date of the offer document, which is Dh1.2335.

What’s on the table?

Sajwani and Maple, the investment company that he owns in full, plan to acquire the 1.07 billion Damac shares that are held by others. The offer price is set at Dh1.3 a share. (On Thursday (June 10), Damac’s stock was back at the Dh1.3 level after dropping 2 fils on Wednesday.)

And Maple makes it amply clear that the offer is final – The “offer price of Dh1.3 set out in the intention and this offer document is final and is not subject to further amendment, whether upwards or downwards…”.

Not enough?

The Damac stock had touched a 52-week high of Dh1.75, while its low for a similar period was Dh0.67. There are some shareholders who believe the offer price should have been at Dh1.5 or slightly higher given that the company’s core fundamentals remain sound even in difficult market circumstances. Plus, these minority shareholders reckon that Damac would be one of the biggest beneficiaries from the ongoing upturn in property buying in Dubai, especially as several of its projects are complete or nearly there.

Once Maple and Sajwani are confirmed of acquiring 17.785 per cent of the Damac held by others, it would take them to the 90 per cent threshold. Buy one more share and that immediately sets in motion the ‘squeeze out’ of all those stock owners who are not in the mood to sell.

Then, it's game, set and match for Hussain Sajwani... 

What happens if someone doesn’t want to sell?
If Maple gets to 90 per cent plus one share, all remaining Damac shares not yet owned by it or Sajwani will be re-registered in the name of the offeror in Damac’s share register.

“Whether or not you have completed an acceptance and transfer form prior to the expiry of the ‘mandatory acquisition notice period’, your Damac shares will be re-registered in the name of the offeror on that date…”