Saudi Arabia's Dur Hospitality and Taiba Investment enter $2.4bn merger talks
15 June, 2021
Saudi Arabia-listed Dur Hospitality Company and Taiba Investment Company are studying a potential merger that could create a $2.4 billion company in the kingdom's hotels, tourism and property market.
If the companies reach an agreement, the potential merger will be at the mercy of approval by regulators and shareholders, the firms said in separate statements to Saudi stock market (Tadawul) on Sunday.
"These discussions usually do not mean necessarily that [a] merger will take place between your two parties," the companies said, without providing further details.
The move comes amid a flurry of merger and acquisitions activity in the kingdom and wider Gulf region, with companies seeking to streamline their operations because they emerge from the Covid-19 pandemic.
Riyadh-based Dur Hospitality, that was established in the 1970s, includes a market capitalsiation of $923m, based on the Tadawul.
The company develops, owns, manages, buys and invests in hotels, restaurants, hotel suites, guest houses, entertainment centres and travel agencies, according to its 2020 twelve-monthly report. Its hotel brands include Makarem, Marriott, InterContinental Hotels Group, hotel apartments company Shada Hospitality and serviced apartments brand Dara.
It also provides services to Umrah pilgrims, furthermore to developing residential, commercial and hotel buildings. Its portfolio includes 30 properties which range from hotel facilities to residential compounds.
In 2020, hospitality activities contributed 73 % of its total earnings while rents contributed 27 %, according to its annual report. In terms of cities, its Riyadh operations contributed the most to its annual revenue, accompanied by Makkah and Tabuk.
Dur Hospitality's main shareholders are Assila Investment Company with a 27.14 % stake, the Public Investment Fund with
16.62 % stake and Mohammed bin Ibrahim Al-Issa with 12 per cent, according to switch data.
The business's net profit after zakat and tax fell 83 per cent to at least one 1.87 million Saudi riyals in the first quarter of 2021, weighed against the same period this past year, due to a reduction in hospitality revenues from the impact of the Covid-19 pandemic, it said.
Taiba Investments is an over-all investment company that also owns a number of hotels. The business, which last month bought two Centro-branded, Rotana-managed hotels in Riyadh and Jeddah from Shuaa Capital for 328m riyals, includes a market cap around $1.44bn. Assila Investments can be its biggest shareholder.
Source: www.thenationalnews.com
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