Saudi Almarai, Hadco agree on takeover terms

HADCO TAKEOVER: Dairy producer, Almarai enters Saudi poultry business through takeover of Hadco. (Getty Images)

Saudi-based Almarai Co on Wednesday offered to take over Hail Agricultural Development Co (Hadco) for $253.2 million, giving it an entry into the lucrative Saudi poultry business.

Almarai, which is the Gulf's largest dairy firm, is offering Hadco's shareholders one new Almarai share and 2.5 riyals for each five Hadco shares, the two firms said in statements.

Almarai's bid, which was accepted by Hadco's board, values Hadco shares at 30.1 riyals ($8.03) each: This offered a 3.4 percent premium before the announcement was made and 35.3 percent on an initial offer Almarai made in November.

Hadco's shares closed 3.09 percent higher after the announcement although many investors bought the stock at prices as high as 31 riyals. Almarai shares closed 0.48 percent down at 155 riyals.

Hadco said its board would recommend to shareholders acceptance of the bid. The two firms fixed a Nov 30 deadline for conclusion of the agreement.

"The deal values Hadco at about 949.5 million riyals," Almarai said.

In addition to being a key domestic player in the poultry business, Hadco produces olives, wheat, dates and grass fodder. Almarai has its own cattle farms. According to Dubai-based Shuaa Capital, Hadco is the kingdom's fourth largest poultry producer.

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.

The deal can only be concluded if Almarai gets to own all shares in Hadco, which means every Hadco shareholder must approve the bid at an assembly which should take place before end-August.

A conclusive end to the bid would give the Saudi bourse its first successful takeover.

Olayan Investment Company Ltd holds 6.2 percent of Hadco's capital and Saleh Abdulaziz al-Rajhi and Co holds 6 percent. The remainder is held by retail shareholders whose individual stakes are all below 5 percent. (Reuters)

Print | Email | Discuss this article

| Share |

READERS' COMMENTS

Click here to post a comment

Add your Comment All posts are sent to the administrator for review and are published only after approval. ArabianBusiness.com reserves the right to remove any comment at any time for any reason. Please keep your responses appropriate and on topic. Arabian Business would like to point out that only comments relevant to the story will be published. Any containing personal insults or inappropriate language will not be approved.
Name *
Remember me on this computer
Email *	(Your email address will not be published)
City
Country
Subject *
Comment *
Notify me of further comments
Enter the words above *
Please click post only once - your comment will not be published immediately.

MORE FROM ARABIANBUSINESS.COM