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Arkan Building Materials has hired advisors to review the proposed merger with Emirates Steel Industries.
The construction and building materials firm has hired British accounting firm KPMG as independent valuer and White & Case as legal advisors to study the proposal submitted by Abu Dhabi industrial conglomerate Senaat, Arkan said in a statement.
Last month, ADQ-backed Senaat submitted an offer for the merger of its wholly owned subsidiary, Emirates Steel, and Arkan to create the UAE’s largest steel and building materials firm.
“Arkan’s Board of Directors will refer to the valuation work of KPMG along with work done by other advisors in assessing the proposed offer before making a recommendation to shareholders,” the statement said.
Senaat has proposed to transfer Emirates Steel to Arkan in consideration of the issuance of a convertible instrument. Once the deal is closed, the convertible instrument will be automatically converted into approximately 5.1 billion ordinary shares at a fixed price of 0.798 dirhams per share in Arkan’s capital.
The offer implies an equity value for Akan of approximately 1.4 billion dirhams. After completion of the deal, Senaat would own about 87.5 percent of the entire issued share capital of the merged entity.
(Writing by Cleofe Maceda; editing by Seban Scaria)
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