SHUAA Capital in merger talks with ADFG

Financial services and investment firm SHUAA Capital has confirmed it is in merger talks with Abu Dhabi Financial Group (ADFG).

The company’s shares jumped 15 per cent to Dhs0.715 on the DFM when the news broke that discussions are underway regarding the possibility of creating a larger financial listed group.

A statement by SHUAA said: “Each party has formed a working group made up of senior executive management to review the commercial potential along with any legal and structural aspects of the transaction together with financial, legal and valuation advisors.

“On completion of the review, the working groups will provide their recommendations to the respective board of directors of each institution and, should a transaction be agreeable, seek regulatory approvals.”

The statement added that there is “no certainty that discussions between the parties will result in a transaction”.

ADFG is already a stakeholder in SHUAA, having boghut 48.36 per cent – or 515 million shares in the company – in November, 2016. ADFG’s CEO, Jassim Alseddiqi, is also the chairman of SHUAA.

In February, SHUAA announced that its 2018 revenues increased to Dhs165.2m, up from Dhs134.6m in 2017, but that profits had decreased by 63 per cent, from Dhs74m in 2017 to Dhs27.2m in 2018. The company said it had taken mark-to-market charges on its investments in in Q4 2018, and additional one-off provisions on legacy assets.