Abu Dhabi offers to set up a major hospitality company

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ADQ has submitted a bid to create a company with assets worth $5.4 billion in a “strategic merger” of two local hospitality groups, as part of a bid to form a larger entity that supports the emirate’s long-term diversification plans.

The bid aims to merge the Abu Dhabi National Hotels Company with one of the companies in the “Holding” portfolio, the Abu Dhabi National Exhibitions Company, according to a statement issued on Wednesday. In light of the news, the shares of Abu Dhabi National Hotels Company jumped by 15%, which is the maximum volatility allowed on the local stock exchange, and headed towards the highest closing price since 2010.The holding said that the proposed deal “will create one of the largest hospitality, event and catering hubs in the region” and will help attract more tourism and business travel to the emirate.

Proposed merger details
The combined group will own approximately $5.4 billion in assets, as of December 31, 2020, including a portfolio of 28 owned and managed hotels and three major exhibition centers in Abu Dhabi, Al Ain and London, as well as catering companies, and food and beverage outlets.
The combined group will be well-positioned for revenue growth and cost sharing opportunities, along with a stronger and more efficient capital structure. The transaction is expected to be “accumulated to earnings shortly after completion”.

The Abu Dhabi National Hotels Company will issue a convertible instrument to the “Holding”, which will convert it into one billion and 221 million, and 374,000 ordinary shares in the capital of the Abu Dhabi National Hotels Company upon closing the deal. The price at which the instrument will be converted into shares in Abu Dhabi National Hotels Company is 3.93 dirhams per share.
The offer means that the value of equity for the Abu Dhabi National Hotels Company is approximately 3.93 billion dirhams. After the completion of the project, the “Holding” will own about 54.98% of the total issued capital of the Abu Dhabi National Hotels Company.





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