#Dubai Risks Driving Out Investors as Public Companies Delist - Bloomberg

Dubai Risks Driving Out Investors as Public Companies Delist - Bloomberg

Betting on Dubai to deliver uninterrupted success as a tourism and entertainment hub is turning into a costly business for some stock investors.

For the second time in less than three months, one of the emirate’s leading companies said it will effectively delist one of its units for about two-thirds of its original public-offering price. Emaar Properties PJSC, which built the city’s iconic Burj Khlaifa tower, announced Tuesday it plans to buy back a 15% stake in its Emaar Malls PJSC unit at a 36% discount to the 2.9 dirhams a share at which it sold it in 2014.

The move has any number of repercussions for a market that’s struggling to sustain interest following a pandemic-triggered selloff last year that was exacerbated by Dubai’s status as a global travel hub. As well as depriving investors of exposure to one of the emirate’s strongest sectors, removing a $6.3 billion company from the DFM exchange may simply drive away would-be buyers, both big and small, from future offerings.

“It could prove an impediment to companies looking to spin off small stakes of 10% or 15% as investors may shy away even if the stock is attractive,” said Mohammed Ali Yasin, the chief strategy officer at Al Dhabi Capital Ltd. in Abu Dhabi. “Fears of minority shareholders not being protected will become a concern for international investors going forward” as well, he said.

Emaar’s decision is additionally worrying for investors because it comes so soon after a similar move from another of the emirate’s leading property developers. In December, government-controlled Meraas Holding LLC proposed taking DXB Entertainments private at a 33% discount.