Saudi approves Almarai's $253.2m bid for Hadco
Riyadh, September 12, 2009
Saudi-based Almarai's $253.2 million cash and stock bid for Hail Agricultural Development Company (Hadco) has obtained regulatory approval, leaving the merger's fate up to the shareholders.
A conclusive end to the bid, which was initially unveiled in July would give the Saudi stock exchange, the Arab world's largest, its first takeover involving listed companies.
Mergers and takeovers among listed firms are a rare sight in Saudi Arabia, due mainly to the pre-eminence of both day-trading and retail investors.
The Capital Market Authority (CMA) said at least 50 percent of shareholders in Hadco, would need to approve Almarai's proposal for the deal to go through.
The two firms have fixed a Nov. 30 deadline for conclusion of the agreement. Hadco shares closed the previous session at 30.1 riyals, which matched exactly Almarai's bid, and was 2.7 per cent its level since the two companies' boards agreed to the takeover terms on July 1.
Almarai had to improve an initial bid it made in November by 35.3 percent. The deal is crucial for Almarai, which is the Middle East's biggest dairy firm, because it would give it an entry into the lucrative poultry business.
According to Dubai-based Shuaa Capital, Hadco is the kingdom's fourth largest poultry producer.
In addition to being a key domestic player in the poultry business, Hadco produces olives, wheat, dates and grass fodder.
Almarai has its own cattle farms. Almarai has been diversifying its revenues through acquisitions and has earmarked 6 billion riyals ($1.6 billion) for investments to expand outside the Gulf Arab region.-Reuters