Qatari conglomerate and an Egyptian investment bank plan to force remaining minority shareholders of Damas International to sell their stock as theentities buying the troubled UAE jeweller prepare to delist it.
Mannai Corporation and EFG-Hermes announced their intention to start a "squeeze out" via a statement on Nasdaq Dubai after receiving acceptance from holders of more than 90 per cent of the company's share capital.
The move would force through the acquisition of the remaining shares at their offer of 45 US cents, valuing the company at about US$445 million (Dh1.63 billion). Those holding out have until June 7 to accept the bid.
"We are very pleased to have reached this important milestone," said Alekh Grewal, the chief executive of Mannai Corporation.
The jeweller's problems began after the company went public. The Abdullah brothers Tawfique, Tawhid and Tamjid, the company's owners when it was a private entity, made huge unauthorised withdrawals of assets from the now-public company that pushed it to the brink of financial ruin.
The brothers were disciplined by the regulator of the Dubai International Financial Centre in March 2010, and they still owe the company money.
Analysts say that Damas was not brought down by any weakness in its jewellery business but by getting into property, an area in which it had no prior experience, along with other issues, and that the company will benefit from synergies with Mannai's retail outlets. The Qatari conglomerate will take a 66 per cent stake in Damas; EFG-Hermes will own 19 per cent and the Abdullah brothers will retain 15 per cent.
The company is to be delisted from the Nasdaq Dubai when the takeover is complete.
News of the forcible takeover of the remaining minority shares comes after it was revealed last week that a long-standing arrangement between the New York jeweller Tiffany & Co and Damas had been scaled back.
All operations, marketing and sales functions for Tiffany in the Emirates will now be the responsibility of Tiffany itself.
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