Aabar Investments PJSC, the Abu Dhabi sovereign-wealth fund that’s Daimler AG (DAI)’s largest shareholder, may reduce its stake in the maker of Mercedes-Benz cars by issuing a bond exchangeable into the manufacturer’s shares.
Aabar plans to raise 1.25 billion euros ($1.76 billion) in the transaction, a person involved in the deal said today. The Abu Dhabi government investment unit initially sought to raise 750 million euros by issuing an exchangeable bond, it said today in a statement. The original issue could reduce Aabar’s holding to 8 percent from 9.1 percent when the bond matures in 2016.
“It sends the signal that there’s limited upside” for the company, when a large shareholder starts to monetize its holding, said Daniel Schwarz, a Frankfurt-based analyst at Commerzbank AG. “I doubt that Aabar wants to completely exit Daimler, but it can’t be ruled out.”
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