Drake & Scull International PJSC rose to the highest level in eight months amid speculation builder Arabtec Holding Co. may buy a stake in the company, a prospect denied this month by Arabtec’s chief executive officer.
The shares of Drake & Scull, which supplies engineering services to the construction industry, climbed 1.1 percent to 91.5 fils, the highest close since August. About 146 million shares traded, the most since June 2009, according to data compiled by Bloomberg. The stock surged 13 percent in the last three days. Arabtec, the biggest publicly traded construction company in the United Arab Emirates, rose 0.5 percent. The benchmark DFM General Index lost 0.3 percent.
There are “rumors that Arabtec is to buy a 25 percent stake of Drake & Scull to complete the business chain,” said Tariq Qaqish, head of asset management at Dubai-based Al Mal Capital PSC. Arabtec bought a stake in Dubai-based interior designer Depa Ltd. in February.
Arabtec Chief Executive Officer Hasan Ismaik said April 16 that the company has no plans to buy a stake in Dubai-based Drake & Scull. Drake & Scull “is not a target of acquisition by anyone,” Zeina Tabari, chief corporate affairs officer, said by phone April 9, responding to questions about a surge in the company’s share price.
Arabtec’s external spokesman referred to the CEO’s earlier comments, when contacted by Bloomberg News today. A spokesman for Drake & Scull didn’t respond to a call to his mobile.
Drake & Scull said April 16 it won projects valued at 1.1 billion dirhams ($299 million) in Saudi Arabia, Qatar and Abu Dhabi in the first quarter and “is poised for significant growth in the second quarter as projects award momentum increases in these markets.” The company said in March it expected “significant” growth in projects this year.
Drake & Scull shares have gained 30 percent this year, matching the surge in Dubai’s benchmark index. Four analysts recommend investors buy the shares, five say hold and five sell, according to data compiled by Bloomberg.