AD Ports on course for delisting as L’imad acquires additional 23.08% stake

Nearly the entire freefloat of AD Ports Group just tendered into L’imad’s buyout, and ADQ is now set to own more than 98.50% of the company — comfortably clearing the threshold to force out what’s left. AD Ports Group said in an ADX disclosure (pdf) yesterday that ADQ — the L’imad Holding subsidiary running the AED 6.25-a-share tender — had received acceptances covering 23.08% of the company’s shares as of close of business on 15 September, on top of the 75.42% it already held.

That’s about 94% of the shares ADQ didn’t already own. The offer covered as much as 24.58% of AD Ports Group — 23.08% of that came in, leaving just 1.50% of the company outstanding. That answers the freefloat question we flagged earlier this week: how many minority holders would follow IHC-controlled Al Seer Marine, which sold its stake to ADQ at the offer price before the tally closed.

Why it matters: Every substantive condition on the offer is now cleared bar routine notifications to the Securities and Commodities Authority and the ADX. Settlement — payment plus the share transfer — is due no later than 9 October, the date ADQ locked in last week.

SOUND SMART- UAE takeover rules allow a bidder holding 90%+1% or more of a company’s share capital to apply to the regulator for a mandatory acquisition — a squeeze-out that forces remaining holdouts to sell at the offer price. ADQ’s 98.50% is well past that line.

What’s next: ADQ can now apply for a mandatory acquisition of the remaining 1.50% within 60 days of settlement, taking AD Ports Group fully private.

REMEMBER- This is the second time this year L’imad has walked this exact path. The company’s utility arm Abu Dhabi Power Corporation lifted its stake in Taqa to 98.12% in a roughly AED 21.6 bn share purchase in June before invoking the same mandatory acquisition mechanism to squeeze out the rest, as we reported at the time. Taqa’s shares came off the ADX earlier this month.

ADVISORS- Rothschild & Co Middle East is financial adviser to ADQ, while Allen Overy Shearman Sterling is providing counsel. Emirates NBD Capital and FAB are joint lead managers, EFG Hermes UAE is co-lead manager, and Emirates NBD Bank and FAB are joint lead receiving banks.