Private equity firm eyes stake in DP World

Dubai-based private equity firm Abraaj Capital could be the suitor circling port operator DP World, analysts said on Sunday.

Early on Sunday a statement from DP World said it was "engaged in discussions with a regional private equity firm which may or may not result in a transaction regarding a minority stake in DP World, coming largely from the free float".

Ian Munro, equity analyst at MAC Capital Advisors told Arabian Business: “Abraaj Capital are quite large in MENA (Middle East & North Africa) and South Asia. The bottom line [with Dubai World] is there is 20 percent free flow and 80 percent is government owned. I don’t think is very likely that Abraaj would be willing to take the 80 percent off Dubai World.

“It more represents a speculative play on the stock,” he added.

DP World is 77 percent owned by government backed conglomerate Dubai World.

A spokesman for DP World on Sunday declined to comment on the approach.

Abraaj Capital , which has around $7.5bn assets under management, raised nearly $2.6bn last September.

DP World shares commenced trading early on Sunday following a suspension on Thursday. Shares in DP World on Sunday climbed 5.6 percent to $0.38 after news of the possible offer.

"DP World is a proxy for improving world trade and with the stock falling from its IPO price of $1.30 there's some trapped value there," said Ali Khan, head of cash-equity trading at Dubai-based Arqaam Capital.

Abraaj Capital declined to comment.

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