Shareholders weigh tough choices ahead of DXBE deal

THEY HAVE UNTIL 6PM TODAY TO MAKE UP THEIR MIND ON MERAAS OFFER

Shareholders in DXB Entertainments, Dubai’s mega theme parks operator, will have some tough choices to make by today.

They have until 6pm today to decide whether they are willing to accept the offer from Meraas, the Dubai Government-owned investment and development company. DXB Entertainments has called for a virtual general assembly today to take up the voting.

If they don’t, shareholders in DXBE will have to consider the possibilities (See box).

Meraas’ offer

The plan is for Meraas to take on the DXBE debt — Dh4 billion plus — and convert it into new DXBE shares. This will raise Meraas’ stake to just over 90 per cent. It will then offer to buy out other shareholders at eight fils for each DXB Entertainments share.

Yesterday morning, the stock was at Dh0.076.

Meraas made the pre-emptive move on the theme parks operator – in which it already holds a majority stake – after DXBE suffered losses widened due to the shutdowns following Covid-19. Taking DXBE private was seen as the best option under the circumstances.

If shareholders give the approval today, it will accelerate the process towards DXBE’s delisting from Dubai Financial Market. Meraas will own 100 per cent of the enterprise.

In February, the Board of

Directors at DXBE gave the go ahead for the acquisition.

Shareholders have been told that “If you do not accept this offer and the transaction conditions are satisfied, including the approval by company shareholders at the general assembly, Meraas intends to exercise its rights to mandatorily acquire your shares during Q22021.

“It is not mandatory to accept Meraas’ offer. Shareholders have the right to accept or reject. Before accepting or rejecting, it is important that you understand the consequences of accepting or rejecting the offer.”

Volatile sessions

The Dubai stock exchange main index slipped 0.92 per cent on Sunday in a thin trade, ending the session at 2,545.64 points.

It was dragged down by Emaar, which closed 0.82 per cent and its subsidiary, Emaar Malls, by 1.69 per cent.

“This correction is in line with the closing of last week after six days in a row rally,” said Michael Stark, Research Analyst at Exness.

“Financial services led by Emirates NBD, down 2.70 per cent, and Dubai Islamic Bank (by 0.63 per cent) weighed significantly on the general index. Upward movers such as Aramex (2.34 per cent) and Emaar Development (1.82 per cent) couldn’t do much to keep the index in green territory.

“We expect high volatility in Monday session affected by financial results disclosure and dividend distribution announcements.”