Al Tayyar jumps 9% on Careem stake sale to Uber

Shares of Al Tayyar Travel Group rose nearly 9 percent on Tuesday following the announcement of Uber Technologies’ $3.1 billion acquisition of Careem, a Dubai-based ride-hailing app.

The stock was trading was up 8.8 percent at SAR 28.35 at 12.45 pm Riyadh time, as nearly 15.9 million shares, worth SAR 447 million, were exchanged.

"The total profit will be SAR 1.78 billion is significant for Al Tayyar given that average profit for the last three years for Al Tayyar is only SAR 400 million," Nishit Lakhotia, Head of Research, SICO Bank, told Argaam. 

"The company can use the proceeds to either pay a special dividend or invest back into its businesses or do a mix of both. As the stock was suspended yesterday, we are seeing the reaction today," he added.

Al Tayyar Travel Group was part of the $10 million investment initially raised by Careem in December 2014.

The company expects to record SAR 1.78 billion ($475 million) in gross profit of which it is likely to record SAR 1.34 billion in FY 2019 financial results, it said in a statement to Tadawul.

“This is a historic moment for the Middle East tech space. It is the largest tech deal in the region and a milestone that will provide the stimulus to grow the digital ecosystem and attract more foreign investments," said Abdullah Aldawood, CEO of Al Tayyar Travel Group.

Write to Parag Deulgaonkar at parag.d@argaamplus.com