Emirati property tycoon Hussain Sajwani has made a 935.4 million dirham ($255 million) offer to buy out minority shareholders in DAMAC Properties (DAMAC.DU), which he has run for nearly two decades.
The all cash offer for DAMAC comes amid a years-long slump in Dubai's once hot property market, which has been exacerbated by the pandemic that hit the local economy hard last year.
DAMAC is best-known for building the Middle East's only Trump-brand golf course, which opened in Dubai in 2017 while Donald Trump was U.S. President.
Sajwani, who resigned as chairman and from the board, has made the offer through investment vehicle Maple Invest Co, which said he directly and indirectly controls 88.106% of DAMAC.
Maple Invest Co intends to increase the holding to at least 90% plus 1 so that it could exercise its right to buy out the remaining minority shareholders, it said in a statement.
DAMAC, listed in Dubai since 2015, would then be delisted.
Maple said it was offering to buy out minority shareholders for 1.3 dirham per share, the same as Tuesday's closing price and giving a total value of the offer of 935.4 million dirhams .
The deal values DAMAC at $2.1 billion, at par with its market value on Tuesday.
DAMAC shares were down 1.54% at 1.28 dirhams in late morning trade, below the buyout offer price.
Reuters reported last year that Sajwani was weighing buying out minority shareholders and taking the company private, sending shares up 11%.
DAMAC shares are down 1.44% year-to-date, while shares of Emaar Properties, Dubai's largest listed developer, are up nearly 14%.
Since Sajwani set up DAMAC in 2002, it has built 33,000 homes and has another 33,000 under construction, its website says.
DAMAC's core business is property development in Dubai but it has also launched projects elsewhere in the Middle East and is building the Nine Elms tower in London.
But Dubai's property sector has weakened for most of the past decade, hurt by oversupply in a market that is largely dependent on foreign investors.
DAMAC posted consecutive annual losses in 2019 and 2020 with Sajwani warning last year of difficult years ahead.
DAMAC's remaining board directors will meet on June 13 to appoint an independent committee to review the offer, according to a regulatory filing.
($1 = 3.6726 UAE dirham)