Post-Merger Entity Will Be Worth Dh194b: Emaar

Emaar Properties said on Sunday that its proposed merger with three property companies owned by Dubai Holdings would create a real estate conglomerate with a combined asset value of Dh194 billion ($53 billion). The new entity, resulting from its merger with Dubai Properties, Sama Dubai and Tatweer, will have total debt obligations of Dh13.4 billion, or around 7 per cent of aggregate assets, Emaar said in a statement posted on the Dubai Financial Market website. The statement, apparently seeking to clarify a joint statement issued by Emaar and Dubai Holdings on Friday, also sought to refute a newspaper report that claimed on Saturday that the proposed consolidation of the four developers would create an entity worth Dh1.83 trillion, or more than nine times its current valuation. The property developer said its own total book value of assets at the end of March 2009 was Dh68 billion, with total debt obligations of Dh10 billion, which is 15 per cent of Emaar’s total assets.

Dubai Properties, Sama Dubai and Tatweer had combined total assets of Dh126 billion at the end of last year, with around Dh3.4 billion worth of external debt obligations, “which is 2.7 per cent of the total book value of their assets,” the Emaar statement said. “The proposed consolidation will create a robust and strategic asset base while joining the strengths of the management teams and employees of these companies,” the statement said on Saturday. Emaar shares tumbled by almost 10 per cent amid concerns about benefits to the shareholders from the proposed merger. Emaar said that it would discuss the transaction structures and valuation in detail with the Emirates Securities and Commodities Authority, “to ensure that all rights of existing shareholders are protected, appropriate value creation for existing shareholders is clearly demonstrated and appropriate disclosures are made in respect of the transaction details.” The exact impact of the merger on the existing shareholders will only be known subsequent to such discussions, it said.