Gulf Cement board greenlights TC Mena Holding takeoveR: ADX-listed Gulf Cement’s board recommended the bid made by majority shareholder TC Mena Holding to acquire the remaining 62.4% of the company or a minimum of 50% plus one share to shareholders, it said in a disclosure to the ADX (pdf).

REMEMBER- TC Mena Holding had submitted the bid earlier this month, offering to buy the additional stake for AED 143.5 mn at AED 0.56 apiece. TC currently owns 37.6% of GCC.

Market reax: Gulf Cement’s shares were up 6.06% to AED 0.7 yesterday, according to market data. The company’s share price has been on a downward trend since 2005.

Buying the dip: The potential transaction checks all the boxes to qualify for what’s called a “distressed asset acquisition,” with the buyer taking advantage of the company’s weak financial position and cheap share price with the goal of turning it around to become profitable and create higher value for shareholders. TC is “pursuing this acquisition to enhance GCC’s operational efficiency, reinforce its market position, and drive long-term value creation for all stakeholders,” it said in the offer document.

What’s next: The general assembly is scheduled to convene on Thursday 17 April — pushed back from 11 April — to mull the offer, which is also pending regulatory approvals from the Securities and Commodities Authority (SCA) and the ADX. Should the transaction go through, Gulf Cement would continue to operate independently and retain its trade name post-acquisition, with no major changes in the cards.

ADVISORS- Emirates NBD is quarterbacking the transaction as financial advisor, lead manager and receiving agent with Ibrahim N Partners providing legal counsel.

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