SODIC might have to up its offer 4x if it wants MNHD: Madinet Nasr for Housing and Development’s (MNHD) portfolio of undeveloped land is worth between 3-4 times more than what SODIC wants to pay for the company, the real estate developer’s managing director, Abdullah Salam, told CNBC Arabia yesterday (watch, runtime: 9:19). MNHD’s undeveloped land has “very promising potential to be developed and become residential and commercial projects,” Salam said, adding that this is what makes it so valuable.

SODIC earlier this month launched a takeover bid for MNHD and offered to pay EGP 3.20-3.40 per share, valuing the cross-town company at as much as EGP 6.36 bn.

But MNHD wants more: MNHD this week rejected the offer and called on SODIC to submit a new bid that reflects the fair value of the company.

What’s a fair value? Salam’s statements yesterday seem to suggest that the company might demand an offer as high as EGP 12.40 a share for it to agree to a sale, valuing it as much as EGP 25 bn.

Putting this in context: That’s more than three times greater than SODIC’s valuation priced by Aldar Properties and ADQ when they acquired the company last year.

MNHD’s shares closed at EGP 2.87 yesterday on the EGX (+7%). Its shares have gained about 17% since SODIC made its offer.

MNHD’s land bank: MNHD owns around 10 mn square meters of land, 5 mn of which are developed or under development, while 4.5 mn square meters are still undeveloped, mainly split between two main projects Taj City and Sarai, Salam said.

Sallam took the helm at MNHD and became a shareholder as the developer acquired his Minka Developments in a transaction announced late last fall. Sallam used MNHD’s 1Q 2022 earnings release (pdf) to signpost what he called “exciting times” for the developer, saying the company is entering “period of change and reinvention that will challenge our team to envision new ways for our business to grow sustainably and create value for stakeholders.” MNHD wants to double deliveries in 2022 and develop recurring revenue streams (including through a push into the commercial property market and through community management fees).

SODIC, meanwhile, is ramping up its competitive metabolism under new ownership. The company’s new Emirati owners are supporting CEO Magued Sherif and his team to think aggressively about growth opportunities. The high-end developer, now celebrating 25 years in the business, reported record 1Q gross contracted sales and profitability, it said in its first-quarter earnings release (pdf), setting up what Sherif said at the time would be a “record year for SODIC” despite a industry backdrop that is being marred by high inflation, rising interest rates and supply chain kinks.

Watch this space: MNHD will convene its general assembly on 16 August to decide whether to allow SODIC to go ahead with due diligence on its takeover bid, MNHD said in a disclosure (pdf) to the EGX yesterday.

MNHD and SODIC have been dancing (on and off) for years: With different shareholding structures on both sides and a different management team at MNHD at the time, the two started talking about combining their businesses in early 2018, which months later saw SODIC make an offer to acquire at least 51% of MNHD through a direct share swap that the two positioned as what would have been Egypt’s largest-ever M&A at the time. Talks fell through after they failed to reach an agreement on the share-swap ratio.