ABU DHABI, (Reuters) – Abu Dhabi state fund Aabar priced its delisting share buyback on Monday, dashing remaining investor hopes for a better price as it retreats from the stock market less than five years since its IPO.
The move takes Aabar, one of the most transparent groups in the secretive world of sovereign funds since its IPO in late 2005, back into the shadows and marks the first delisting of a local firm from the Abu Dhabi bourse.
Aabar Investments, more than 70 percent state owned and the biggest shareholder in German carmaker Daimler with 9.1 percent, said it would pay minority shareholders 1.45 dirhams a share, in line with Sunday’s closing share price but down 19 percent since it announced plans to delist in June.
Early on in the delisting process there was speculation that minority shareholders might be offered a price closer to the conversion price of 2.5 dirhams per share set for a convertible bond sale in May.
The fund’s highest profile acquisition this year was a 4.99 percent stake in UniCredit which made it the Italian bank’s second largest shareholder.
“It is good that the offer has come out. If it’s the best thing for minority shareholders, that remains to be seen,” said Mohammed Yasin, Shuaa Securities chief executive.
“There are gaps in the law which needs to be fixed to address the interests of minority shareholders in a similar event,” Yasin said.
The offer, worth about 1.64 billion UAE dirhams ($447 million), will be valid from July 12 to Aug. 1. The firm also asked the market regulator for permission to delay a July 26 shareholders meeting called to discuss the delisting until Aug. 8.
Aabar surprised investors last month when it announced it was considering delisting.
The firm, with estimated assets of $10 billion, is 72-percent owned by Abu Dhabi government investment vehicle International Petroleum Investment Corp (IPIC) according to Reuters data.
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The move allows the fund to disclose less about its aggressive investment strategy and its financial results.
“Whether you call it a sovereign wealth fund or a private equity firm, it’s definitely the model of a fund rather than a public company. Disclosure requirements were putting pressure and it makes sense to delist,” Yasin said.
In May, Aabar said its first-quarter profit leaped to 1.58 billion dirhams, mainly due to derivatives income, after revising its year-ago result to a deep loss.
Aabar, launched in 2005 as a small energy company, sold most of its energy assets shortly after formation.
Paying $2.5 billion last month for its UniCredit stake and $2.7 billion last year for its holding in Daimler, Aabar also has 32 percent of Virgin Group’s space travel unit Galactic.
Aabar shares were trading down 2.07 percent at 1.42 dirhams at 0833 GMT on the Abu Dhabi bourse.
The 2005 IPO raised 394 billion dirhams and was oversubscribed 800 times at 1 dirham per share plus 2 fils as subscription fees per share, according to Aabar’s website.