UAE government officials have told Aabar Investments to raise its buyout offer to minority shareholders by over a third after the Abu Dhabi company angered investors with a lowball bid.
Aabar, controlled by government investment vehicle International Petroleum Investment Corp (IPIC), must increase the price to 1.95 dirhams per share from the 1.45 announced last week, the United Arab Emirates' bourse watchdog said in a statement on Sunday, citing the ruling of a panel that included officials from the UAE economy ministry.
It said the new offer price is based on the average closing price of the share in the six months preceding the offer. The announcement from the Emirates Securities & Commodities Authority (SCA) sent Aabar's share price up 8.3 percent to 1.59 dirhams and drew renewed criticism from an investment community already angry that the initial offer was so low.
"The timing has been unfortunate. The suggestion that 1.45 would be the trade price would have caused investors to sell around that level," says Zahed Chowdhury of Al Mal Capital.
"The fact there are no clear rules and regulations for such events didn't help anybody." Another investor said trading in the investment firm, whose holdings include about 9 percent of German carmaker Daimler and 4.99 percent of Italian bank UniCredit, should have been halted after news on July 12 that the government panel would study the offer.
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