According to unsourced reports, Aabar is in talks to buy at least 50 per cent of Hasan Ismaik’s stake.
Regulator freezes Arabtec shares as rumours swirl over Dubai builder’s stake sale
The Securities and Commodities Authority has suspended Arabtec shares from trading until the UAE’s largest contractor can provide more information on a rumoured share sale by its former chief executive.
The UAE markets regulator suspended Arabtec stock from trading on the Dubai Financial Market after the company failed to comment on widespread rumours and media reports of a share deal between Aabar Investments and Hasan Ismaik.
Trading was suspended “awaiting clarification from the company on media reports about strategic partners’ stake”, the DFM announced in a post on its website yesterday.
Mr Ismaik, who recently departed Arabtec, holds 28.8 per cent of the company’s shares, making him the biggest shareholder. Aabar is Arabtec’s second biggest shareholder with an 18.9 per cent stake.
According to unsourced Bloomberg reports, Arabtec is in talks to buy at least 50 per cent of Mr Ismaik’s stake, increasing its holding to more than 30 per cent at a price of between Dh5 and Dh6 a share.
Before they were suspended, Arabtec shares were trading at Dh4.95 a piece.
A representative for Aabar declined to comment when asked about the deal and calls to Mr Ismaik’s personal mobile phone went unanswered.
An Arabtec spokesman also declined to comment.
At a press conference on July 2, the Arabtec chairman Khadem Al Qubaisi told reporters: “The point I am sending here is that, Aabar and Arabtec, we are in a good alliance and we will continue to improve this alliance. Maybe there is the possibility for Aabar to increase its stake in Arabtec in the near future.”
On Tuesday, Arabtec shares rose 13.5 per cent as rumours of the potential deal began to circulate.
“If what we are seeing today means that the DFM and the ADX will go further in demanding disclosure from all traded companies then this is a very good thing,” said Sanyalak Manibhandu, the research manager at NBAD Securities. “What we have seen today means that the DFM may be picking up its level of management.”
The news is the latest in a turbulent six months at Arabtec. The stock started the year at just over Dh2 a share before soaring to a high of Dh7.40 on May 14 as Mr Ismaik announced a series of ambitious plans, and rumours circulated that the company was seeking to merge with major rivals to become one of 10 biggest construction companies in the world.
However, the boom did not last. Following Mr Ismaik’s unexpected departure from the company and the news that Aabar had reduced its shareholding, shares plummeted to a low of Dh2.61 at the end of June.
Analysts also welcomed news of the potential share purchase by Aabar.
“This is not a great surprise,” said Tariq Qaqish, the head of asset management at Al Mal Capital. “We have all heard the rumours but until now there has not been any official confirmation. If it is true then it would be positive news for Arabtec as it shows that Aabar is fully committed behind Arabtec.”
The news also comes after Arabtec began an advertising campaign promising investors that “Arabtec is closer to you than ever” with details of its investor relations team’s telephone number.
Follow The National’s Business section on Twitter