Dubai’s Meraas offers to delist park operator DXB Entertainments

Dubai government-controlled Meraas Holding is offering shareholders a 33 per cent discount to take theme park operator DXB Entertainments private, six years after raising money from equity investors to build the amusement hub.

Meraas plans to acquire debt worth Dhs4.26bn ($1.16bn) and convert it into new DXBE shares, boosting its ownership to more than 90 per cent. It will then offer to buy out other shareholders at Dhs0.08 in cash for each DXB Entertainments share, below the Dhs0.12 closing price on Sunday.

DXBE was listed to capitalise on Dubai’s booming tourism sector in 2014, but it’s struggled for years to hit targets for visitor numbers. Its troubles were exacerbated by lockdowns put in place to combat the coronavirus pandemic.

The company hasn’t posted a profit since listing and the stock has lost more than 90 per cent of its value since a peak in 2016. DXBE’s initial public offering valued it at Dhs5.75bn, nearly nine times more than implied by Meraas’s offer.

In March, Emirates NBD and Dubai Islamic Bank acquired the company’s debt from mainly non-United Arab Emirates-based lenders at a discount to allow Meraas to restructure the park operator with a small group of Dubai banks, people familiar with the matter told Bloomberg.

DXBE’s IPO had attracted institutional investors such as sovereign wealth funds from Qatar and Kuwait and wealthy families, who made offers of about Dhs100bn, the company had said at the time.

Meraas holds a 52 per cent stake in DXB Entertainments, which still counts Qatar’s sovereign fund and Kuwait Investment Authority as other shareholders.