Taiba Holding to acquire additional stake in ARAC

Taiba Holding Co. (Taiba) has inked a conditional agreement on Tuesday to purchase an additional 0.326 percent stake in Arab Resort Areas Co (ARAC) percent, in return of issuing new shares in Taiba to ARAC’s shareholders through a capital increase, Taiba said in a statement to Tadawul.

The deal is part of an acquisition agreement signed on Sept. 26 to acquire an 8.1 percent stake valued at SAR 255.2 million in Al Aqeeq Real Estate Development Co., and to purchase equity of 12.31 percent, valued at SAR 106.4 million in ARAC.

The deal brings the value of the equity Taiba aims to acquire in ARAC to SAR 109.2 million.

Taiba’s currently owns 91.89 percent of Al Aqeeq and an 86.87 percent stake in ARAC, aiming to completely own Al Aqeeq and own from to 99.53 percent in ARAC upon completing the acquisition deals.

Al Aqeeq has a market value of SAR 3.15 billion, while ARAC’s market value reaches SAR 725 million.

Taiba will increase capital by 6.92 percent from SAR 1.5 billion to SAR 1.6 billion through issuing 10.4 million shares, valued at SAR 34.85 each, at a swap ratio at 0.60 a share for Al Aqeeq shareholders, and a swap ratio of 0.50 a share for ARAC shareholders.

The acquisition came as part of Taiba’s revamp strategy.

The deal’s financial impact is expected to positively show on Taiba’s results. The company said the deal does involve related parties.