Shares of Depa, which fitted out the world’s tallest tower in Dubai, jumped 11 percent, the most since Nov. 21, to 39 cents at the close in Dubai. Trading was at nine times the three-month daily average, at 983,009 shares. Arabtec, which bought a 24 percent of Depa in November at a 47 percent premium, may raise its stake to 100 percent, Cairo-based EFG-Hermes analysts Jan Pawel Hasman and Shaza El Kady said in a report yesterday.
Arabtec said yesterday it plans to raise 6.4 billion dirhams ($1.74 billion) through a rights issue and convertible bonds after the biggest publicly traded United Arab Emirates builder named Hasan Ismaik as its new chief executive officer. The move “could hint at a major shift in Arabtec’s strategy, followed by potential local and regional acquisitions,” according to EFG-Hermes.
The purchase would give Arabtec control of a company that fits out luxury hotels, yachts and apartments, and may boost the value of Depa, whose price estimate was raised by 50 percent to 60 cents by EFG-Hermes. Arabtec would need to start a mandatory offer and the bid may be much higher than Depa’s 35-cent closing price yesterday or the 44 cents per share Arabtec paid for its existing stake, according to the Cairo-based investment bank.
Arabtec, which mainly builds homes and offices, is poised to benefit from additional awards from Abu Dhabi government, according to EFG-Hermes. The builder won large projects in the U.A.E. capital in the past year, including construction of a branch of the Louvre museum and the midfield terminal at Abu Dhabi airport. Its shares tumbled 9.8 percent today.
Three analysts recommend investors hold the shares of Depa, according to data compiled by Bloomberg. The company may post a loss of $27 million for 2012, according to the median estimate of four analysts on Bloomberg.
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