Former CEO Of Dubai’s Arabtec Says Wants Over Dhs5 Per Share

A former chief executive of major Dubai construction firm Arabtec said he was in talks on selling some of his stake to Abu Dhabi’s Aabar Investments and wanted over Dhs5 per share, a level about four per cent above the current market price.

Arabtec’s shares are among the most heavily traded in Dubai and their fate is pivotal for the entire bourse. When management turmoil at the company caused a 70 per cent tumble of its stock price between mid-May and early July, there was panic selling across the market.

Hasan Ismaik, who abruptly resigned from Arabtec in June but remains the biggest shareholder in the company, said he was in talks with Abu Dhabi state fund Aabar to sell part of his 27.90 per cent stake.

He declined to reveal exactly what price he was asking or specify how much of the stake he might sell. But he said no deal had been done so far because his minimum price had not been reached. “For me, Dhs5 per share is not acceptable,” he told Reuters by telephone on Wednesday.

Arabtec’s market price has jumped 13 per cent to Dhs4.79 in the past four trading days as investors have speculated that a deal might be near.

They hope a sale of a substantial part of Ismaik’s stake to Aabar, which already owns 18.94 per cent of the company, would remove a potential overhang from the market and guarantee that the deep-pocketed Aabar would continue supporting Arabtec by steering lucrative business its way.

An Aabar spokesman could not be reached to comment. In the past, Aabar has declined comment on its intentions toward Arabtec.

Ismaik said in late June, soon after resigning, that he had received several offers for his stake from parties he declined to identify. At that time, he said he might only consider selling at Dhs6 or Dhs7 per share.

The company now has a market capitalisation of about $5.75 billion; the shares are still far below a record peak of Dhs7.74 hit in May this year.

Ismaik became CEO in early 2013 and presided over a huge expansion of the company’s project pipeline, which was partly thanks to the support of Aabar. He resigned as rumours circulated of a rift between himself and Aabar; he denied there was any split, saying he was leaving for personal reasons.