Dubai’s Emaar Values Malls Unit at $6.5 Billion in Takeover Bid


(Bloomberg) — Emaar Properties PJSC, the Dubai-based developer of the world’s tallest tower, plans to take over its malls unit, in a transaction that will value the business at 24 billion dirhams ($6.5 billion).

Emaar Properties, which already owns 85% of Emaar Malls, proposed to pay 0.51 shares for every one share in Emaar Malls, the companies said a statement. According to Bloomberg calculations, the offer values Emaar Malls’ at 1.85 dirhams per share and a 10% premium to its last closing price.

  • Link to statement

A property glut and faltering demand in Dubai have driven prices down by more than a third since the market peaked some seven years ago. The decline has been made worse by the coronavirus pandemic, and Emaar last year temporarily halted new projects.

The company sold its share in Emaar Malls, which operates one of the world’s biggest shopping centers in the Middle East business hub, in 2014. The order book was more than 30 times oversubscribed for the institutional segment, and more than 20 times for the individual part at the top of the price range at 2.9 dirhams.

Restrictions to check the spread of the coronavirus pandemic weighed on the business for most of last year, though visitor numbers started to pick up when curbs were eased. Still, Emaar Malls posted a wider-than-expected loss for the year.

  • Emaar Prices Malls Unit IPO at Top Range as Dubai Market Surges
  • Dubai Real Estate Market May Bottom Out Next Year, S&P Says

The shares of Emaar Properties, the biggest listed developer in Dubai, last closed at 3.63 dirhams, while Emaar Malls ended at 1.69 dirhams.

Property broker JLL said in January that Dubai developers are likely to continue a high supply momentum this year, an increase that means two more years of price declines. The chief of Damac Properties PJSC, one of Dubai’s largest developers, said last month it will take at least one to two years for the real estate market to get out of its downturn.

Emaar Properties:

  • Stock advanced 5.8% in the past 52 weeks. The Dubai Stock Index gained 1.3%.
  • The shares are up 1.4% in the past 5 days and fell 7.9% in the past 30 days.
  • Emaar Properties trades at 6.8 times its estimated earnings per share for the coming year.

Emaar Malls:

  • Stock advanced 9% in the past 52 weeks.
  • The shares are up 0.6% in the past 5 days and fell 7.1%t in the past 30 days.
  • Emaar Malls trades at 13 times its estimated earnings per share for the coming year.

©2021 Bloomberg L.P.