Taiba Holding Co. signed on Sunday a memorandum of understanding (MoU) with shareholders of Al Aqeeq Real Estate Development to acquire an 8.1 percent stake in the company for SAR 255.23 million, Taiba said in a statement to Tadawul on Monday.
The nine-month MoU could be renewed for similar periods, upon mutual approval.
Under the deal, Taiba will increase its capital to SAR 1.57 billion from SAR 1.5 billion through issuing 7.32 million shares to Al Aqeeq shareholders, namely Mohammad Ibrahim Al-Issa; Abdullah Al-Rabiah; Suleiman Al-Mudaiheem; Turki Al-Sudairi, Khalid Al-Sultan; Abdul Aziz Al-Shabana; Ahmed Al-Ghamdi, and Ghassan Shalaby.
Their ownership in Taiba will increase to 28 percent from 24.48 percent.
Taiba currently owns an 89.89 percent direct and 1.74 percent indirect stake in the real estate developer through Arab Resort Areas Co. (ARAC), which holds a 1.99 percent interest in Al Aqeeq. Upon completion of the deal, Taiba will raise its direct ownership in the developer to 98.01 percent.
Al Aqeeq’s fair value was defined at SAR 3.15 million. Meanwhile, the new shares, which will be allocated for Al Aqeeq shareholders, are priced at SAR 34.85 each, with a swap ratio of 0.60.
The sale transaction is subject to the approval of the Saudi Capital Market Authority (CMA), Ministry of Commerce and Investment, and Taiba’s extraordinary general assembly meeting.
NCB Capital acted as financial advisor for the deal, hired by Taiba Holding.