Shuaa Capital in acquisition talks, has 3 IPOs in pipeline

Shuaa Capital is working on a bolt-on acquisition of a financial services company based in the United Arab Emirates as part of the investment bank’s growth plans, chairman Jassim Alseddiqi told Reuters on Monday.

The price for the targeted company, which specialises in capital markets and securities, would be less than Dhs200m ($54.46m), Alseddiqi said. He also said discussions were at an advanced stage and the transaction could be completed within the next six months.

Alseddiqi is also the chief executive officer of the investment company Abu Dhabi Financial Group, which bought a 48.36 per cent stake in Shuaa Capital last November.

Shuaa is considering financing options as part of its acquisition plans, Alseddiqi told Reuters, adding that debt funding options could be looked at specifically for the financial services company acquisition.

Shuaa Capital is also working on three initial public offerings (IPO), two of which are likely to be finalised within 2017, Alseddiqi said.

The two companies set to be listed this year are both UAE-based. One is a real estate company and the other a real estate investment trust (REIT). The market cap of the REIT company is Dhs3bn, and the size of the IPO will be Dhs500m, Alseddiqi said.

The third company working on a potential IPO with Shuaa Capital is in the financial services sector, he said.

Shuaa Capital’s balance sheet and total assets at the end of 2016 amounted to Dhs1.3bn, it said in a statement.

The company plans to have some Dhs5bn under management by the end of this year and a total of almost Dhs9bn by 2020, the chairman said.

The bank will continue to focus on the UAE market, but also Saudi Arabia and Egypt, Alseddiqi said.

Shuaa Capital bought a 14 per cent stake in Bahrain’s Khaleeji Commercial Bank for BD9.6m ($25.49m) in December. The Bahraini bank, an Islamic lender, has obtained approval to list on the Dubai Financial Market, which could happen over the next few months, Alseddiqi said.