Abu Dhabi wealth fund sees Daimler stake drop

Legal technicality sees Aabar Investments’ share in German carmaker decline
Abu Dhabi wealth fund sees Daimler stake drop
Mohamed Badawy Al-Husseiny, chief executive of Aabar Investments
By Reuters
Wed 12 Oct 2011 10:17 AM

Abu Dhabi sovereign wealth fund Aabar Investments appeared
to cut its stake in Daimler nearly in half in July, dropping just below the 5
percent threshold only to now say that the cause was a legal technicality.

According to a regulatory disclosure by the German carmaker,
Aabar informed Daimler earlier on Tuesday that it owned barely less than 5
percent of the company's stock on July 8.

A spokeswoman for Aabar declined to say why Daimler was not
informed earlier of the move.

A statement by Aabar clarified that it still effectively
controlled a 9.04 percent share, and blamed the technical drop on 8,000 stock
options that were exercised.

"Aabar remains fully committed to its position in
Daimler and continues to be supportive of Daimler's management and
strategy," it said, adding the development was "not a result of a
permanent divestiture of Daimler shares by Aabar."

The fund said it continues to own 53.3 million shares in
Daimler directly, and also has the right to redelivery of an additional 43.1
million shares.

Legal ownership of the latter tranche was transferred,
however, by way of lending the stock as collateral to finance Aabar's original
acquisition of Daimler shares in March 2009, reducing its direct stake to just
above the 5 percent mandatory disclosure threshold.

Aabar became Daimler's largest investor after buying a 9.1
percent holding in Daimler for €1.95bn ($2.66bn), or €20.27 per share, through
a capital increase that excluded existing shareholders.

Daimler shares closed on Tuesday up 1.4 percent at €35.85.

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