Tamweel PJSC soared the most in more than a year amid bets Dubai Islamic Bank PJSC will revive a bid to buy the 13.6 percent stake it doesn’t already own in the Dubai-based mortgage provider.
The shares rallied 15 percent, the most since March 2012, to 1.33 dirhams at the close in Dubai. About 9.4 million shares traded, 8.3 times the three-month daily average. Tamweel was the biggest gainer in percentage terms on the DFM General Index, which increased 0.2 percent. The yield on Tamweel’s $300 million 5.154 percent sukuk fell 3 basis points to 3.4 percent at 2:04 p.m. in Dubai, taking its July drop to 102 basis points.
Dubai Islamic may reopen a tender offer of 10 of its shares for every 18 Tamweel shares held to achieve 100 percent control before delisting the company, Jaap Meijer, Dubai-based director of equity research at Arqaam Capital Ltd., said in e-mailed note to clients yesterday. That offer would amount to a 71 percent upside, he said. Tamweel shares gained 3.6 percent yesterday.
The second offer would most likely take place “through an unchanged 10:18 swap, to insure equality among target shareholders,” Meijer said. Arqaam said it raised Tamweel to buy on expectations Dubai Islamic will relaunch its offer.
Dubai Islamic, the biggest Shariah-compliant lender in the United Arab Emirates, raised its Tamweel stake from 58 percent earlier this year. Shares of the mortgage company, which slumped 21 percent last month, have underperformed the DFM General Index in 2013, increasing 17 percent compared with the broader measure’s 57 percent advance.
“A few buyers have embraced the idea that the Securities and Commodities Authority will force DIB to reopen the tender offer,” Julian Bruce, head of institutional trading at EFG-Hermes Holding SAE in Dubai, said by e-mail today.