Almarai sweetens offer for Hadco

SHARE SWAP: Almarai eyes Hadco's poultry business. (Getty Images)

Saudi-based Almarai Co., the Gulf's largest dairy firm, unveiled on Saturday an improved share swap bid for Hail Agricultural Development (Hadco) that values it at 921 million riyals ($245.6 million), or 30.7 riyals per share.

The latest offer represents a near 38 percent premium to the 22.25 riyals per share it tabled in November.

Almarai said it has reached an accord with Hadco under which its shareholders will get one Almarai share in exchange for five Hadco shares, plus 0.5 riyals ($0.13) for each Hadco share, Almarai said in a statement on the bourse website.

In November, Almarai proposed giving Hadco shareholders one share in Almarai for six Hadco shares.

The new share swap constitutes an 18.1 percent premium on Hadco's shares before Saturday's announcement, after which its stock rose by the maximum 10 percent limit to 28 riyals.

The conclusion of the deal is subject to the completion of necessary due diligence and obtaining  shareholder and regulator approval.

"Almarai intends to acquire 100 percent of Hadco ... in a transaction which we believe could be finalised in the next two to three months," Shuaa Capital's Laurent-Patrick Gally said.

The offer is "more favorable to Hadco shareholders than for Almarai shareholders," he added.

Almarai is interested in Hadco because of its poultry business, Khalid al-Nasser, Almarai investor relations manager, told Reuters.

Hadco, based in the Hail region in north Saudi Arabia, is the fourth largest poultry producer in the country.

Almarai has been diversifying its revenues through acquisitions and has earmarked 6 billion riyals ($1.6 billion) for investments to expand outside the Gulf Arab region. (Reuters)

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