ADQ, Aldar-backed SODIC makes $337-mn offer for Egyptian developer

 ADQ, Aldar-backed SODIC makes $337-mn offer for Egyptian developer

Egypt’s Sixth of October for Development and Investment Company (SODIC) has made a non-binding cash offer to acquire Madinet Nasr for Housing and Development S.A.E. (MNHD) through a mandatory tender offer.

The transaction, if successful, would expand SODIC’s footprint in the East Cairo market, widen its customer base and leverage both developers’ strengths to achieve scale and create value through a combined undeveloped land bank of around 11 million square metres.

SODIC said it is considering making an offer in the range of EGP5.99 billion to EGP6.365 billion ($317-337 million), implying a price per share in the range of EGP3.20 to EGP3.40.

This represents a 28-36% premium to the MNHD’s closing price on July 4, a day ahead of the announcement.

This also represents a premium of 40-49%, 41-49% and 36-44% to the company’s three-month, six-month and twelve-month volume weighted average price, respectively.

The indicative purchase price implies a price-to-book multiple of 1.4x-1.5x and a price-to-earnings multiple of 20.8x-22x based on the last twelve months’ reported figures for the period ended March 31, 2022.

The proposed transaction is backed by SODIC’s major shareholders, Aldar Properties and ADQ, who collectively own 85.5% of the Egyptian Exchange-listed company.

Aldar is the leading real estate developer and manager in the UAE with its shares traded on the Abu Dhabi Securities Exchange. Established in Abu Dhabi in 2018, ADQ is one of the region’s largest holding companies with direct and indirect investments in more than 90 companies locally and internationally. Both an asset owner and investor, ADQ’s broad portfolio of major enterprises span key sectors including energy and utilities, food and agriculture, healthcare and pharma, and mobility and logistics, amongst others.

Established in 1996, SODIC is a leading real estate developer in Egypt. It has a track record in developing large-scale mixed-use communities across West and East Cairo and the North Coast. SODIC says its communities house more than 30,000 residents across 12,000 homes.

SODIC has retained Cl Capital as its financial advisor on the transaction and MHR & Partners in association with White & Case LLP as its legal advisor.

Vivek Sinha

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