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Wednesday, 8 December 2021

Aldar, ADQ are now SODIC’s majority shareholders

The Aldar-ADQ consortium officially owns 85.5% of SODIC: The Emirati consortium of real estate giant Aldar Properties and Abu Dhabi sovereign wealth fund ADQ have acquired 85.5% of SODIC in an all-cash, EGP 6.1 bn transaction, Aldar and SODIC (pdf) said in separate statements yesterday following the conclusion of the mandatory tender offer. Aldar / ADQ paid EGP 20 per share after having originally said they would offer EGP 18-19. The offer price values the company at EGP 7.1 bn and was at an 18% premium to the volume-weighted average price of EGP 16.88 at which SODIC shares traded in the three months prior to the takeover having been announced.

SODIC’s (now former) largest shareholder is among those selling: A consortium of Act Financial, Hassan Allam Properties, and Concrete Plus Engineering offloaded their entire 15% stake in the MTO, a top executive at one of the companies confirmed to Enterprise.

The consortium had bid for up to 90% of the upmarket real estate developer and had set a floor of 51% for the transaction to go through. The consortium is 70% owned by Aldar and 30% by ADQ.

SODIC’s share price was unmoved by the news, closing down 0.2% to EGP 19.71 yesterday, while Aldar’s Abu Dhabi-listed shares closed up 1.7%.

“Aldar has identified Egypt as a priority market for international expansion, driven by a strong belief in the country’s potential and the macro-economic fundamentals driving the real estate sector. After studying the market, SODIC emerged as our desired entry-partner and is a natural commercial fit for Aldar,” Aldar CEO Talal Al Dhiyebi said.

SODIC is happy with the acquisition: “The transaction provides SODIC’s shareholders with immediate and substantial cash value reflecting the company’s solid financial position and strong brand equity,” Managing Director Magued Sherif said, adding that the consortium brings financial strength as well as a solid track record in institutional real estate investment, development of premium quality communities and destinations, and property management.

Analysts say it’s good news for the real estate sector: The acquisition is “very positive” for the sector, Beltone Research Vice President Aly Adel tells us. The existence of foreign players in the sector is an indicator that, despite the view in some quarters that there is a bubble in the market, demand is strong, he said.

The transaction has been in the works for almost nine months: Aldar Properties submitted a non-binding offer to acquire at least 51% of SODIC’s shares back in March. The consortium then presented its takeover offer in September, when it initially tabled EGP 18-19 per share, which would have valued SODIC at EGP 6.6 bn. The Financial Regulatory Authority approved the bid last month, kicking off the 10-day subscription window from 24 November.

What’s next: The transaction will be finalized in the coming days and the shares will be transferred by 16 December, Aldar said.

Advisors: CI Capital advised Aldar and ADQ. EFG Hermes advised SODIC and BDO did fair value duties.

Aldar might want more of Egypt’s real estate sector: The acquisition of SODIC “is a part of Aldar’s overall expansion strategy into the attractive Egyptian real estate market, with Aldar currently assessing several [potential ventures],” it said in September.

OTHER M&A NEWS- Real estate developer Al Organi Group has acquired the Royal Grand Sharm Hotel in Sharm el Sheikh from Banque Misr according to a statement from the bank (pdf). The sale is part of the bank’s asset recycling strategy, the statement says, without providing further details on the transaction. A senior Banque Misr representative was unavailable for comment ahead of dispatch time.

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