Shares of Mawashi, also known as Qatar Meat and Livestock company rocketed after suspension on trading of shares were lifted yesterday. The government plans to acquire the company, according to a statement on the Qatar bourse.
Qatar plans to take over meat company
The Qatari government has launched a takeover bid for the country's lone meat and livestock importer, leading to a surge in the company's share price.
Trading in Qatar Meat and Livestock Company, also known as Mawashi, resumed yesterday on the Qatar Exchange after being suspended since Thursday.
The stock rose as much as 10 per cent to 16.81 rials yesterday after news of the possible takeover was posted on the website of the Qatari bourse. The report cited the ministry of economy and finance. "The government aims through this step at enhancing the performance of the company and expanding its activities due to the significant importance of the company's activities in the Qatari society as it is the main provider of meat and livestock," the statement said. "This step is attributed to the company's inability to meet the future needs of the society in terms of quantity and quality."
Mawashi imports much of its supply from Australia, where prices are expected to rise 25 per cent this year because of recent catastrophic floods in the country's north-east, a strengthening of the Australian currency and higher shipping costs.
The company has been under pressure to consider countries such as Georgia and Uruguay, which supply livestock more cheaply.
But Qatari consumers are not expected to be hit by higher costs, as government subsidies should make up the difference.
Mawashi, which was founded specifically to supply most of Qatar's meat and livestock needs, is 20 per cent owned by the Qatari government. An independent party will be assigned to determine a fair price for the company's shares.
The government will have to pay at least 15.29 rials a share, which was the closing price on February 9, the statement to the bourse said.
The proposal has yet to be accepted by the company's board and shareholders. "No agreement has been made as yet," said Basheer Oman, an office manager at Mawashi.