Milestone for investors’ rights - The National Newspaper

Yesterday’s decision by a Government committee to raise the price paid to minority shareholders in Aabar Investments sets a precedent for shareholders’ rights and paves the way for new regulations on mergers and acquisitions, lawyers believe.

The committee, comprising representatives of the Emirates Securities and Commodities Authority (SCA), the Federal Ministry of Economy and the Abu Dhabi Department of Economic Development, told International Petroleum Investment Company (IPIC) to raise its Dh1.45 per share offer for Aabar to Dh1.95. IPIC, a government-owned investment vehicle that owns 70 per cent of Aabar, made the Dh1.45 offer last week as part of a plan to buy the rest of the company and take it private.

The UAE currently has no regulations explicitly covering takeovers. Given the lack of legal clarity, the Government’s decision on IPIC’s offer was closely watched because of its implications for minority shareholders. Some investors criticised the Dh1.45 price as too low, given that Aabar shares had traded at above Dh2 in recent months. The price also valued the company at less than half its book value.