Aldar, Sorouh Delay Merger Vote After Too Few Investors MeetZainab Fattah
Shareholders of Aldar Properties PJSC and Sorouh Real Estate Co. will convene for a second time to vote on a planned merger after an insufficient number of investors attended two separate meetings today.
Voters representing 50 percent of the stock will be sufficient to constitute a quorum at the second round of extraordinary general meetings on March 3. The level was 75 percent in the first round. Abu Dhabi’s largest developers expect their shareholders to approve the transaction, according to spokesmen of the companies. They asked not to be identified, citing company policy.
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 9.4 percent since the announcement as investors deemed the deal’s terms to favor the smaller of the two developers. Aldar gained 4.1 percent during that period. Shares of both companies closed unchanged today.
Abu Dhabi’s government has taken an increasingly direct role in supporting builders and development projects after the credit crisis kicked off a real estate slump that caused values to drop by more than 50 percent. The oil-rich state spent $9.8 billion to bail out Aldar in 2011 and last year it backed the revival of halted projects including branches of the Louvre and Guggenheim museums.