Abu Dhabi’s Eshraq, Reem to create mega realty firm

Abu Dhabi / Agencies

Eshraq Properties Company PJSC (“Eshraq”) and Reem Investments PvJSC (“Reem”) confirmed that the discussions are at an advanced stage over a potential strategic investment in Eshraq (by way of subscription for new shares to be issued by Eshraq) in return for the acquisition of Reem’s entire business and assets (the “Potential Transaction”). This Transaction will create the second largest listed real estate developer
in Abu Dhabi.
Reem was established in 2005 and is considered one of the largest and most successful real estate companies in Abu Dhabi. It also owns prime development land in Abu Dhabi.
The Board of Directors of Eshraq and Reem believe that the Potential Transaction is expected to be beneficial to the shareholders of both companies resulting in synergies derived from integrating their operational and financial resources and as well as combining their management experience and expertise.
The Potential Transaction remains subject to a number of conditions, including the final agreement of specific deal terms including price as well as obtaining the required regulatory approvals.
Eshraq is being advised by SHUAA Capital PSC (financial advisor) and Reem Investments is being advised by First Abu Dhabi Bank PJSC (financial advisor).
Eshraq, which had assets of AED1.46 billion ($398 million) at the end of June, reported a net profit of AED636,000 for the second quarter compared to a year-earlier loss
of AED101.4 million. Its shares gained 2.4 percent early on Wednesday in response to the merger
announcement.
Unlisted Reem had net assets of 5.3 billion dirhams at the end of last year, when its annual net profit edged up 2 percent to 216 million dirhams, according to its website.
Abu Dhabi’s two biggest property firms, Aldar Properties and Sor-
ouh Real Estate, merged in 2013
to create a firm with about $15
billion in assets.