The Dubai-based ports operator DP World has announced its intent to return to private ownership.
DP World’s parent company, Port and Free Zone World, has offered to acquire 19.55 per cent of the operator’s shares currently traded on Nasdaq Dubai, a statement said.
On completion, DP World will operate as a wholly owned subsidiary of Port and Free Zone World.
The move will facilitate DP World to focus on its transitionary strategy from being a global port operator to becoming an infrastructure-led end-to-end logistics provider.
Each DP World share will be acquired at $16.75, representing a 29 per cent premium on the market closing price of $13 on Sunday, the statement said.
In recent years, the company has made a series of acquisitions as part of its strategy to become the world’s leading end-to-end logistics provider.
In Q4 2019, DP World acquired a 77 per cent stake in the Feedertech Group.
In Q3 2019, DP World also acquired Dubai-headquartered oil services and marine logistics company Topaz Energy and Marine in a deal worth $1.08bn from Oman-listed Renaissance Services and Standard Chartered Private Equity.
In Q2 last year, it agreed to purchase Canadian marine terminal Fraser Surrey Docks from a Macquarie Group fund.
“The global ports and logistics industry has been undergoing a significant transition as a result of the consolidation of the customer base and the vertical integration of several competitors,” said Sultan Ahmed bin Sulayem, group chairman and CEO, DP World.
“DP World must be able to continue responding effectively to this rapidly changing landscape and to invest in the future.”
Yuvraj Narayan, group chief financial, strategy and business officer of DP World, said: “Delisting from Nasdaq Dubai is in the best interest of the company, enabling it to execute its medium to long-term strategy. DP World is focussed on the transformation of the group and takes a long-term view of investment returns and value creation. In contrast, public markets typically hold a short-term view.”
“As a result of this gap, the DP World strategy is not fully appreciated by the equity markets, and consequently is not reflected in the company’s share price performance.”