Property and bank stocks led declines on the country's bourses yesterday with Aldar Properties extending losses following news of its planned merger.
Aldar, which hit a 23-month intraday high on Monday, fell 7.5 per cent to Dh1.36 while Sorouh Real Estate lost 2.9 per cent to Dh1.65.
Once the merger is approved by shareholders, Sorouh will delist from the market and shareholders will be paid 1.288 Aldar shares for every Sorouh share. The swap ratio is regarded by some analysts as favouring Sorouh investors.
"The offer values Sorouh at Dh2.10 per shares. On the face of it, this is actually quite a good deal for the Sorouh minority shareholder, since our fair value for Sorouh as a stand-alone company amounts to Dh2.33 per share," said NBK Capital.
"Given the uncertainties surrounding the still-declining Abu Dhabi real estate market, a discount of just 10 per cent to our fair value does not seem unreasonable."
The Abu Dhabi Government will own a 37 per cent stake in the new firm and will also pay Sorouh Dh3.2 billion in exchange for some assets.
Sorouh shares, which rallied to their highest close since December 2010 on Monday, fell 0.6 per cent.
Tamweel may benefit from some gains after the firm posted a 11.3 per cent drop in fourth-quarter net profit yesterday, but beat the estimate of two analysts polled by Reuters.
But potential gains could be limited by the impending delisting of the stock, if shareholders approve Dubai Islamic Bank's acquisition of the 41.8 per cent of Tamweel that it does not currently own.
In Saudi Arabia, Kingdom Holding will be in focus after the investment firm of billionaire Prince Al Waleed bin Talal posted an 11.6 per cent increase in its fourth-quarter net profit.
In other news, PetroRabigh said it had restarted its petrochemical and refining complex after a power cut shut down operations last month.
* with Reuters