DUBAI: Dubai-based builder Arabtec will buy the 40-percent stake in Target Engineering it does not already own to expand its move into the oil and gas construction business, two sources with knowledge of the deal said.
Arabtec underwent a management shake-up last month, driven by its biggest shareholder Abu Dhabi investment fund Aabar, which saw its chief executive replaced.
Arabtec, which bought a 60-percent stake of Target in 2007, is expected to announce the deal in coming days. No valuation was immediately available.
Arabtec declined to comment.
Target Engineering specializes in oil and gas and marine projects with operations in the UAE, Qatar and Saudi Arabia.
The unlisted firm’s turnover was $387 million last year, according to its website.
Target’s current work in hand, as of end 2012, was $310 million, with turnover for 2013 estimated to be around $477 million, the website stated.
“This makes perfect sense for Arabtec considering their plans to grow the oil and gas business. Target is well experienced in such projects and their work is growing,” said an analyst.
Arabtec said recently it would rely on the reputation of its biggest shareholder and proceeds from a planned $1.8 billion capital raising to expand its business. Aabar owns stakes in companies such as commodities trader Glencore and Italian bank UniCredit.
Cario-based EFG-Hermes said in a Feb. 28 note that Arabtec might use funds from the capital hike to take over Dubai interiors contracting firm Depa, in which it has a 23.4 percent stake.
One source close to the company said the Target acquisition would be one of the first key steps made by the new management. Aabar has been exerting its influence since it started buying shares in the company last year.
It replaced four Arabtec board members with its own candidates and named its chairman, Kadem Abdulla Al-Qubaisi, as Arabtec’s chairman.
Dubai builder Arabtec to buy rest of Target Engineering
Dubai builder Arabtec to buy rest of Target Engineering
Closing Bell: Saudi main index rises to close at 11,341
RIYADH: Saudi Arabia’s Tadawul All Share Index rose on Wednesday, gaining 12.75 points, or 0.11 percent, to close at 11,341.27.
The total trading turnover of the benchmark index was SR5.15billion ($1.37 billion), as 84 of the listed stocks advanced, while 168 retreated.
The MSCI Tadawul Index increased, up 3.84 points or 0.25 percent, to close at 1,530.98.
The Kingdom’s parallel market Nomu lost 233.47 points, or 0.97 percent, to close at 23,810.24. This comes as 31 of the listed stocks advanced, while 39 retreated.
The best-performing stock was Al Majed Oud Co., with its share price surging by 6.02 percent to SR156.80.
Other top performers included Advanced Building Industries Co., which saw its share price rise by 5.75 percent to SR42.32, and Al Kathiri Holding Co., which saw a 5.50 percent increase to SR2.11.
On the downside, the worst performer of the day was Elm Co., whose share price fell by 5.99 percent to SR699.
Abdullah Saad Mohammed Abo Moati for Bookstores Co. and United Cooperative Assurance Co. also saw declines, with their shares dropping by 3.60 percent and 3.08 percent to SR45.02 and SR3.78, respectively.
On the announcement front, Saudi Arabian Refineries Co. has announced the completion of the issuance of the articles of association and the commercial registration of its holding company under the name Masafi Ventures Co. Holding, a wholly owned single-person limited liability company.
SARCO’s share price closed at SR51.80 on the main market, marking a 0.19 percent decrease.
In another announcement, Multi Business Group Co. has announced a project award from the National Housing Co. for the design and execution of the Al Aziziyah Sales Center.
The contract involves all construction, architectural, fit-out, and electromechanical engineering works for the new sales facility, according to a statement on Tadawul.
The company’s share price remained unchanged at SR10 on the parallel market.
