Aldar and ADQ consortium to buy 90% of Egyptian developer Sodic

The all-cash offer of 20 Egyptian pounds per share to Sodic shareholders values the company at $453m

The headquarters of Aldar Properties in Abu Dhabi. Sammy Dallal / The National

A consortium comprising Abu Dhabi’s Aldar Properties and ADQ, one of the region’s largest holding companies, submitted an all-cash mandatory tender offer to buy up to 90 per cent of the share capital of Egypt’s Sixth of October for Development and Investment Company.

The partnership is offering a purchase price of 20 Egyptian pounds per share, valuing the company at 7.1 billion pounds ($453m), Aldar said in a statement on Tuesday to the Abu Dhabi Securities Exchange, where its shares trade.

This represents a premium of 18 per cent over the three-month volume-weighted average price of 16.88 pounds and a premium of 21 per cent over the six-month VWAP of 16.50 pounds.

“This proposed acquisition of a majority stake in Sodic is a part of Aldar’s overall expansion strategy into the attractive Egyptian real estate market, with Aldar currently assessing several opportunities,” the Abu Dhabi developer said.

With its headquarters in Cairo and listed on the Egyptian Exchange, Sodic is one of Egypt’s top real estate companies with a number of residential, commercial and retail projects.

The offer to Sodic shareholders follows a rigorous due diligence process carried out by the consortium, which is 70 per cent owned by Aldar and 30 per cent by ADQ.

The final price “represents a compelling liquidity event and value proposition for Sodic’s shareholders, reflecting the company’s robust fundamentals and brand equity”, Aldar said. The offer is subject to approval by Egypt's Financial Regulatory Authority.

Aldar Properties, which is behind mega projects such as the Formula One race circuit on Yas Island, reported a 7.6 per cent jump in second-quarter profit, thanks to higher revenue and rental income as the UAE’s property market continues to recover from the coronavirus pandemic.

Net profit attributable to owners of the company for the three-month period to the end of June climbed to Dh520m ($142m) while revenue and rental income rose more than 9 per cent annually to about Dh2.2bn.

Aldar also revamped its business and adopted a new operating model with a parent company overseeing its core development and investment businesses.

Aldar Development, which is responsible for building out the company's 75 million square metre land bank, will have three subsidiaries – Aldar Projects, Aldar Ventures and Aldar Egypt, it said earlier this year.

Sodic booked a record 7.4bn pounds in sales last year as it handed over 1,162 units, it said in January. The company's developments include the mixed-use Sodic Westown, Eastown, Kattameya Plaza and Caesar schemes, among others.

Set up in 2018, ADQ has a portfolio of companies in important sectors of Abu Dhabi’s non-oil economy such as tourism and hospitality, aviation, transport, logistics, industrial, property, media, health care, agri-foods and financial services.

Its portfolio includes the Abu Dhabi Power Corporation, Abu Dhabi Airports, Abu Dhabi Ports, Etihad Rail, healthcare provider Seha, insurer Daman, Abu Dhabi National Exhibitions Company and media companies Abu Dhabi Media and twofour54.

Earlier this year, ADQ bought Egypt’s Amoun Pharmaceutical Company from Canada's Bausch Health for $470m to build its healthcare portfolio. It is also investing up to $1bn in Abu Dhabi-based retail chain Lulu International Holdings to help the company expand its operations in Egypt.