A. SREENIVASA REDDY (ABU DHABI)
The board of directors of AD Ports Group has recommended that shareholders accept the conditional voluntary cash offer by Abu Dhabi Developmental Holding Company (ADQ).
The board, which met on Wednesday, made the recommendation based on the fairness opinion issued by HSBC Bank Middle East Limited, ADGM Branch, the company’s independent financial adviser.
HSBC concluded that the proposed offer price of Dh6.25 for each AD Ports share covered by the offer is fair, from a financial perspective to holders of those shares.
The board also approved the shareholders’ circular relating to the offer.
ADQ, a wholly owned subsidiary of L’IMAD Holding Company, currently owns 3.84 billion AD Ports shares, representing approximately 75.42% of the company’s issued share capital. The offer covers the remaining 1.25 billion shares, or about 24.58%, and seeks to take ADQ’s ownership to 100%.
Shareholders are being offered Dh6.25 in cash for each AD Ports share tendered. The offer price represents a 23% premium to the company’s closing price of Dh5.10 on August 14, the last trading day before ADQ announced its intention to make the offer.
The offer opened on August 18 and is scheduled to close at 3pm UAE time on September 15, unless extended with the approval of the Capital Market Authority. The result of the offer is expected to be announced on September 16, subject to any extension of the offer period.
The offer remains subject to a number of conditions. If these are satisfied or waived, the offer is expected to become unconditional within three months of the closing date. Payment to shareholders who have validly accepted the offer, and registration of the relevant shares in ADQ’s name, are expected within three business days after the offer becomes unconditional.
L’IMAD said AD Ports plays a strategic role in supporting the resilience and sustainability of Abu Dhabi’s economy. It said the company’s continuing capital expenditure requirements and long-term investment programme could constrain its ability to distribute dividends to shareholders and limit short- to medium-term returns.
Acquiring the remaining shares, according to the offer document, would give AD Ports greater flexibility to pursue its long-term strategy, including capital investment programmes, strategic acquisitions and operational transformation initiatives, without the constraints associated with short-term return expectations.
The offer document also said the transaction provides shareholders with an immediate liquidity opportunity at a premium to the prevailing market price.