UAE’s Aldar Properties (Aldar) has presented a preliminary non-binding offer for the potential cash acquisition of a majority stake in the Six Of October Development and Investment Company (SODIC), implemented by a consortium controlled and majority owned by Aldar.
The offer for a 51% minimum stake in SODIC is subject to due diligence, applicable regulatory approvals, and other conditions. Following a satisfactory outcome of the due diligence process, the Aldar-led consortium intends to make a mandatory tender offer in accordance with applicable laws and regulations.
In its offer to SODIC’s board, Aldar stated that the indicative purchase price offered would be in the range of EGP 18 to EGP 19 per share.
The mid-point of the range values the company at EGP 6.6bn ($420m), and represents a 14% premium to SODIC’s closing price on 11 March 2021
Naeem Research sees the acquisition announcement as good news for SODIC. Although the premium over the share price seems minimal, the advantages of having the backing of one of the largest developers in the region, combined with SODIC’s strong brand equity, would be significant from a long term perspective.
Sodic continues to seek opportunities to expand its land bank and is keeping the New Administrative Capital (NAC) on its radar.
Around 40,000 sqm of commercial built-up area (BUA) are expected to come on line in fiscal year (FY) 2020/21.
