Emaar moves to buy out Emaar Development minorities at a valuation of AED 60 bn

Emaar Properties is going ahead with a 100% buyout of its construction arm Emaar Development, according to a DFM disclosure (pdf). The developer is offering AED 15 per share for up to 100% of the issued and paid-up share capital of Emaar Development that it doesn’t already own. Currently, it owns just over 79% of the unit. The proposal is still subject to shareholder approval.

The transaction would value the construction arm at around USD 16.3 bn and would cost Emaar Properties about AED 12.6 bn. The AED 15 share price on offer is 7.9% higher than its last close on the day Emaar Properties’ plans first got out, but still down 25% from a February high, having shed value during the war. October alone saw it lose 7.3% after Dubai residential sales values fell 47% y-o-y in 3Q. It’s also below its average price target of AED 16.54, according to data compiled by Bloomberg.

Why now? Emaar’s board is meeting this week to review ways to create shareholder value and, with the construction arm being its main cashflow generator, full ownership would give the developer more control over fund generation at a time when it has a busy pipeline.

A full buyout would likely take another big name off the DFM. Emaar Development raised about USD 1.3 bn when it listed in 2017. Its predecessor, Emaar Malls, was delisted during Covid at about two-thirds of its IPO price. Damac went private months later at nearly 45% below its 2015 listing, and both exits raised concerns about investor appetite for Dubai’s market. A full buyout would also add to a run of big names leaving UAE bourses this year. Taqa left the ADX on 1 September after L’imad subsidiary Abu Dhabi Power Corporation bought out its minority shareholders. L’imad has since lifted its AD Ports stake to 98.93% and moved to squeeze out the rest, with a delisting expected to follow.