Arabtec Surges Amid Talks to Combine With Abu Dhabi’s Trojan
Arabtec Surges Amid Talks to Combine With Abu Dhabi’s Trojan
(Bloomberg) -- Arabtec Holding PJSC shares soared in Dubai after the company started talks to merge with Abu Dhabi-based Trojan Holding LLC.
The stock advanced as much as 13%, the steepest intraday gain since July 2017, as Arabtec said the entities began a study to potentially combine their construction businesses and may merge after technical, financial and legal reviews. It didn’t provide further details.
The talks come as a property-market slowdown weighs on companies in the United Arab Emirates. Property prices in the U.A.E., the second-biggest Arab economy, have dropped about 27% since October 2014 amid excess supply and sluggish economic growth. S&P Global Ratings expects prices in Dubai, the Middle East’s business hub, to fall by another 5% to 10% this year.
Read More: Arabtec Says Moelis Advising It on Debt Restructuring Options
Arabtec’s first-half profit plunged 49% as contracts dried up. The company, controlled by Abu Dhabi’s Aabar Investments PJS, said last year it’s working with Moelis & Co. on restructuring debt.
Arabtec shares were up 11% at 12:51 p.m. local time, trimming their year-to-date decline to 6.8%. The stock has underperformed Dubai’s benchmark index, which is up 14% in 2019.
--With assistance from Filipe Pacheco.
To contact the reporter on this story: Abbas Al Lawati in Dubai at aallawati6@bloomberg.net
To contact the editors responsible for this story: Shaji Mathew at shajimathew@bloomberg.net, Paul Jarvis, Monica Houston-Waesch
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