UAE jeweller Damas' owners planning to offload stake in company
Source: BI-ME with Reuters , Author: Posted by BI-ME staff
Posted: Wed February 8, 2012 4:46 pm

UAE. UAE jeweller Damas International has appointed Japan's Nomura to advise it on a potential offer from Qatari conglomerate Mannai Corp, three sources familiar with the matter said on Wednesday.

Mannai, whose operations span the oil and gas, automotive, travel and logistics sectors, last month said it had secured commitments from shareholders, including the key Abdullah brothers, to buy 58.8% of Damas at 45 US cents a share.

At that price, an offer would value Damas at around US$445 million, according to Reuters data. The stock, trading at 36 cents on Wednesday, has surged since the news of deal talk on January 4, gaining 63% year-to-date.

Mannai has until April 30 to make an offer to all the shareholders.

The Abdullah brothers have been sidelined from the jeweller they helped found and which has been forced to restructure US$872 million in debt. A 2010 inquiry found that the brothers owed the jeweller US$167.2 million, including US$70 million worth of gold.

The sources said on Wednesday the brothers were being advised by PricewaterhouseCoopers, while Doha-based Mannai is being advised on financial due diligence by consultant KPMG while Clifford Chance is handling legal issues.

The sources declined to be identified as the matter has not been made public yet. Damas Chief Executive Anan Fakhreddin and Mannai officials declined to comment. One Abdullah brother referred all queries to Damas.

After Damas 2008 initial public offering, the Abdullah brothers owned between 51% and 53.1% combined, according to bourse data.

It was not clear if the Abdullah brothers, Tawfique, Tawhid and Tamjid, still own that much of the company.

Mannai said in January that 37 percent of commitments came from the Abdullah brothers and 21.8% from other unnamed shareholders.

Any deal is still far from being completed, one of the sources said.

"They have to take into account the interest of Damas' minority shareholders. It's far from done for now and there is a lot of uncertainty involved," the source said.

For Mannai, the deal would be its second buy in the UAE after it snapped up a 35% stake in Axiom Telecom in 2011.

 

MIDDLE EAST BUSINESS COMMENT & ANALYSIS

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UAE. The strengthening economic fundamentals, the amelioration in the risk profile of major regional countries, the governmental implementation of key business-friendly reforms are all stimulating factors for deal generation activity, according to a Bureau van Dijk and MENA Research Partners report.
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