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- The combined group would be well positioned for revenue growth opportunities and cost synergies, along with a stronger, more efficient capital structure
- The transaction is expected to be earnings accretive shortly after completion
Abu Dhabi: ADQ, one of the region’s largest holding companies with a broad portfolio of major enterprises spanning key sectors of Abu Dhabi’s diversified economy, has submitted an offer to Abu Dhabi National Hotels Company PJSC (‘ADNH’) for a strategic combination of ADQ’s Abu Dhabi National Exhibitions Company (ADNEC) PJSC with ADNH.
The proposed transaction would create one of the largest hospitality, events, and catering powerhouses in the region that would enhance Abu Dhabi’s tourism and hospitality sectors and position them for the Emirate’s longer-term, economic transformation. The potential strategic combination seeks to provide greater synergies through better alignment and repositioning of key assets within ADNEC’s portfolio, and is expected to be earnings accretive shortly after completion.
The combined group would have assets of approximately AED 20 billion (approximately USD 5.4 billion) as of 31 December 2020. The activities of the resulting company would comprise a portfolio of 28 owned and operated hotels with a total of approximately 6,700 rooms, three large exhibition centres in Abu Dhabi, Al Ain and London (UK) as well as several catering companies and food and beverage outlets.
In consideration for the transfer of the shares in ADNEC to ADNH, ADNH would issue to ADQ a convertible instrument that would convert into 1,221,374,045 ordinary shares in the capital of ADNH upon closing of the transaction. The price at which the convertible instrument will convert into shares in ADNH is approximately AED 3.93 per share. The offer implies an equity value of approximately AED 3.93 billion for ADNH. Following completion, ADQ would own approximately 54.98 percent of the entire issued share capital of ADNH.
Mansour AlMulla, Chief Investment Officer, Alternative Investments and Mergers & Acquisitions, ADQ, commented: “This proposed offer provides a unique opportunity to create value by bringing together two major players in Abu Dhabi’s hospitality and events sector. The combined company would benefit from increased scale, new revenue opportunities, and an enhanced capital structure that will position it well for future growth.”
If the Board of ADNH recommends proceeding with the transaction, it will be subject to shareholder and regulatory approvals. Should it receive the necessary approvals, the transaction could close during the second half of 2021.
© Press Release 2021
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