Aldar Drops as Acquisition Gains Seen Overdone: Abu Dhabi Mover

Aldar Properties PJSC (ALDAR), Abu Dhabi’s biggest developer, fell for the first time since acquiring Sorouh Real Estate Co. on June 30 as investors speculated gains were overdone.

The shares fell 2.6 percent to 2.25 dirhams at the close in Abu Dhabi today, trimming this year’s gain to 77 percent. Aldar shares were the most-active in the Bloomberg GCC 200 Index (BGCC200) of the largest companies in the Gulf, with more than 117 million changing hands today. Aldar’s stock gained 11 percent in the previous three days. Abu Dhabi’s ADX General Index (ADSMI) fell 0.7 percent to 3,583.74, trimming this year’s gain to 36 percent.

Aldar completed the acquisition of Sorouh on June 30, creating a company with $13 billion in assets. The smaller builder’s shares were delisted from Abu Dhabi’s bourse after shareholders received 1.288 Aldar shares for each share held in an all-stock transaction.

“If not fairly valued, the share is now very close,” Fadi Al Said, senior fund manager at ING Investment Management in Dubai, said by phone. “Today’s drop is profit taking after yesterday’s gains.” Aldar rose 6.45 percent yesterday.

HSBC Bank Middle East Ltd.’s analyst Patrick Gaffney on June 23 set the price estimate for Aldar at 2.6 dirhams, the highest among eight analysts in a Bloomberg survey. Gaffney has a neutral rating on the stock. Three analysts recommend investors buy Aldar shares while three advise holding the stock, according to data compiled by Bloomberg.

Moody’s Investors Service yesterday raised Aldar’s rating to B1 from B2 and said it was keeping the company on review for an upgrade.

To contact the reporter on this story: Zainab Fattah in Dubai at zfattah@bloomberg.net

To contact the editor responsible for this story: Andrew Blackman at ablackman@bloomberg.net

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