Retal publishes shareholders’ circular for capital hike

Logo of Retal Urban Development Co.

Retal Urban Development Co. published the shareholders’ circular prepared for its shareholders regarding a capital increase through the issuance of 55 million new ordinary shares to Al-Fozan Holding Co., in consideration for acquiring Al-Fozan’s entire ownership stake in Ajdan Real Estate Development Co., equivalent to 14.25 million ordinary shares.

Under the share swap agreement, the company will acquire 14.25 million ordinary shares in Ajdan, with a nominal value of SAR 10 per share, owned by the seller. This will be in exchange for a capital increase in Retal in accordance with Article 60 of the Offering Rules, through the issuance of 55 million new ordinary shares with a nominal value of SAR 1 per share to the seller.

Upon completion of the acquisition, Retal’s capital will increase from SAR 500 million to SAR 555 million, and the number of its shares will rise from 500 million to 555 million ordinary shares, each with a nominal value of SAR 1. This represents an 11% increase in Retal’s current capital.

Retal’s existing shareholders, excluding the seller, will hold 42.4% of the company’s capital, while the seller, Al-Fozan, will hold 57.6% in Retal.

The company stated that the total value of the target shares was assessed at SAR 881.65 million. Based on the agreed volume-weighted average price (VWAP) of Retal shares over the 90 trading days preceding the date three days before the signing of the non-binding offer, which was signed on June 4, 2025, covering the period from January 20, 2025, to June 1, 2025, at SAR 16.03 per share.

Retal’s share price was fixed for the purposes of the transaction in accordance with the pricing mechanism stipulated in the non-binding offer. Accordingly, Retal was valued at SAR 8.015 billion, based on a share price of SAR 16.03 and 500 million ordinary shares outstanding before completion of the transaction.

Retal’s agreed share price for the transaction differs from its closing share price on the last trading day preceding the signing of the share swap agreement, which stood at SAR 12.00 per share, the company added. The consideration for the target shares will be settled through the issuance of new shares, namely 55 million new ordinary shares in Retal. The implied market value of the new shares will be determined by reference to Retal’s latest daily closing share price on the trading day preceding the date of issuance of the new shares.

Retal noted that, if the acquisition is approved by the extraordinary general assembly convened specifically to vote on the transaction, ownership of the target shares will be transferred to Retal upon completion of the acquisition.

According to Argaam data, Retal set December 3, 2026, as the date for its extraordinary general assembly to vote on the board’s recommendation to increase the company’s capital through the issuance of 55 million new ordinary shares, as shown in the following table: