Emaar announced the big news that they are looking forward to merging Emaar Properties and Emaar Malls. This is believed that the amalgamation of the two units might bring Emaar to the highest level of integrated and diversified real estate company of MENA. This initiative will lead to the instigation of opportunities in the marketplace and uplift the shareholders’ value. It was also announced that each of the Board of Directors agreed to share their shares for the merge.
As a part of the agreement, the going about the business of Emaar Malls will be constituted again with a completely owned subsidiary of the Emaar Properties. It will continue to develop and hold a portfolio of lavish shopping malls and retail assets. Also, Emaar Properties would still be listed on the Dubai Financial Market.
As per a statement, “The proposed merger has the unanimous support and recommendation of the board of directors of Emaar Properties and Emaar Malls (acting through its independent directors) and will reinforce Emaar Properties’ position as Mena’s largest integrated and diversified real estate company, ensuring both Emaar Properties and Emaar Malls are strategically positioned to capture opportunities in the marketplace and drive shareholder value…”.
It is expected that the merge of Emaar Properties and Emaar Malls will enhance the market value of the venture as a national real estate champion. With an economic lens, it will continue to contribute to the ongoing development of the city. This is evident through the words of Vijay Valecha, chief investment officer, Century Financial, who said, “Already some large banks have merged as a part of consolidation in the financial sector. The latest merger will help in reducing costs and thereby improve the financial strength of the combined entity”, according to Khaleej Times.
Going according to the words of Valecha, Emaar Properties, particularly, will be enhanced as the e-commerce division of the Emaar Malls is growing dramatically. Emaar Properties accounts for almost one-third total revenue of Emaar Malls. In addition to this, the value of Emaar Malls is rising with time. In addition to this, Emaar Malls closed approximated down of AED 1.69 on Tuesday; on the other hand, Emaar Properties uprose by six fills to AED 3.63 in a broader positive market.
According to Khaleej Times, “The proposed transaction would be effected as a statutory merger and by way of a share swap, with Emaar Mall’s shareholders (excluding Emaar Properties) receiving 0.51 Emaar Properties shares for every one Emaar Mall share. This represents a premium of 7.1 percent to the closing price of Emaar Malls on 1 March 2021, the last trading day prior to this announcement, and a premium of 11.2 percent to the market-implied exchange ratio based on volume-weighted average prices over the last one month to 1 March 2021.”
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