Damac has entered into a bidding war with Abu Dhabi Capital Management to win control of the London-listed luxury property developer Northacre.
ADCM, through its investment vehicle Spadille, made a public offer of 96 pence per share to Northacre investors last Friday, according to a filing posted on the London Stock Exchange.
The Abu Dhabi boutique investment company offered shareholders the choice between a payment in cash or non-transferable unsecure loan notes, with a coupon rate of 10 per cent annually.
Damac, which holds a 25.4 per cent stake in the company, said it was "considering making a counter offer for Northacre at a level higher than that currently being proposed by Spadille".
The Dubai developer urged Northacre shareholders to resist the Abu Dhabi offer "until further notice".
Northacre, which developed The Lancasters apartments near Hyde Park, has focused on converting office buildings into mid-income housing to help increase revenues.
Its shares have risen 32 per cent in the past 12 months, trading at 99 pence yesterday in London. Last month, the British developer confirmed a committee was in negotiations with two companies for a potential takeover.
ADCM's offer price was at a 21.5 per cent premium to the closing share price last Friday.
"It's a fair valuation … It's not a steal, obviously ADCM will require a lot to take the company where it needs to be," said Mustafa Kheriba, ADCM's chief operating officer.
Arabian Gulf investors, particularly from Qatar, have made more purchases in prime luxury property in London, in an effort to shield their wealth from regional turmoil.
Mr Kheriba said ADCM would keep its current offer price and was "confident" that it would win the deal. Damac said it was "unable to comment" when contacted.
If the deal was approved, the Abu Dhabi company would expand Northacre's offering beyond prime central London. ADCM plans to bring Northacre to the Middle East and the Emirates.
"There are a lot of projects coming up and it would have to rely on the developer having its finances in place," said Mr Kheriba. "But the company has good potential."
Yesterday ADCM, which last year listed a fund on the London AIM market, said it planned to open an office at the Dubai International Financial Centre.
