Sorouh Real Estate Co. and Aldar Properties PJSC rallied after the biggest developers in Abu Dhabi sought to complete their merger this month, helping the benchmark index rebound from losses.
Sorouh climbed 8.3 percent to 2.99 dirhams, the highest since November 2009, while Aldar advanced 4.3 percent to 2.42 dirhams, the strongest since January 2011. They were the most-traded stocks on the benchmark ADX General Index, which pared losses to close little changed.
Aldar and Sorouh, which plan to create a developer with $13 billion in assets, said today they expect the proposed merger to take effect between June 20 and June 30 after approval from the Abu Dhabi Executive Council and a ministerial resolution. Aldar is offering 1.288 shares for every Sorouh stock in an all-share transaction. Sorouh won’t be halted before the merger takes effect, the companies said today.
Sorouh shares rose on “news that the merger will be effective by end of the month, and the shares will not be halted from trading during that period,” said Nabil Farhat, a partner at Abu Dhabi-based Al Fajer Securities.
About 79 million Sorouh shares were traded, or 4.3 times the three-month daily average, compared with 176 million for Aldar, almost five times the average for the same period. Sorouh has more than doubled in value this year and Aldar gained 91 percent.
Four analysts recommend investors buy Sorouh while two say hold and two say sell, according to data compiled by Bloomberg. That compares with four buys, three holds and one sell for Aldar.