Sorouh Real Estate Co. will probably have to wait until next month before shareholders approve a planned merger with Abu Dhabi developer Aldar Properties PJSC, a person familiar with the matter said.
The Abu Dhabi-based company is unlikely to meet quorum at an extraordinary general meeting scheduled for Feb. 21 to vote on the combination, the person said, asking not be identified because the information is private. Sorouh will most likely achieve the required headcount at a March 3 meeting, the person said. The stock fell 1.1 percent, the most since Feb. 7, to 1.85 dirhams at the close in Abu Dhabi.
“We are working hard to encourage all of our 35,000 plus shareholders to attend the EGM this Thursday either by proxy or in person,” according to an e-mailed statement from a Sorouh spokesman, who declined to be named citing company policy. “It is not unusual for companies to obtain quorum only at the second EGM meeting. We remain confident of a successful vote in favor of a merger.”
Aldar’s board last month approved a plan to offer 1.288 shares for each Sorouh stock in a government-backed acquisition to create the Middle East’s third-largest publicly traded developer. Sorouh stock has gained 14 percent since the announcement as investors deemed the merger terms to favor the smaller of the two developers. Aldar’s shares fell 7.4 percent in the period.
Abu Dhabi, which bailed out Aldar in 2011, is seeking to revive its property market after prices fell more than 50 percent during a crash in the United Arab Emirates. Sorouh’s 2012 net income surged 32 percent while Aldar’s profit more than doubled after the emirate said it would resume stalled real estate projects including branches of the Louvre and Guggenheim museums.
Shareholders of each company would reconvene on March 3 in the event that the quorums aren’t achieved at the first EGM, according to a statement on a joint website. An Aldar spokesman, who declined named citing company policy, said the developer is confident a vote next month will succeed if quorum isn’t reached this week.
Shares of Aldar fell 2 percent to 1.51 dirhams today. State-owned Mubadala Development Co. converted Aldar bonds at 1.75 dirhams a share, creating 396.5 million shares in the company which are set to be listed on Feb. 24, the developer said today.