Aramex shares experienced a significant increase of nearly 15% on Monday afternoon following news that Abu Dhabi Developmental Holding's unit, Q Logistics, has made a bid to acquire a controlling stake in the prominent Emirati logistics company. This acquisition bid marks a pivotal moment for both Q Logistics and Aramex, aiming to reshape the future dynamics of the logistics industry in the region. Q Logistics plans to submit a voluntary conditional cash offer to acquire all issued and paid-up ordinary shares not already owned by its affiliate, Abu Dhabi Ports, which currently holds a 22.69% stake in Aramex.
The proposed offer outlines that Aramex shareholders will receive 3 Emirati dirhams in cash for each share they hold. This proposal is particularly noteworthy as it reflects a 33% premium compared to the company's closing share price recorded on January 9. Furthermore, the offer price represents a 35% premium over Aramex's one-month volume weighted average price of 2.23 dirhams per share. The strategic rationale behind Q Logistics’ acquisition is clear.
The management expresses confidence that this acquisition aligns well with its overarching vision while enhancing its existing transport and logistics assets. Q Logistics has identified Aramex's recent challenges, especially its subpar financial performance since 2019, as a unique opportunity for transformational change.
As a potential major shareholder, Q Logistics aims to implement strategies that could significantly improve Aramex's financial health, especially given that the company did not distribute dividends for the year 2023. While the offer has generated excitement in the market, it remains contingent upon thorough due diligence and the necessary governmental, corporate, regulatory, and statutory approvals to proceed.
Thus far, no final arrangements for implementation have been set in stone, indicating that there is still work to be done before the acquisition can be actualized. Rothschild & Co. is engaged as the financial adviser for this acquisition offer, bringing expertise in navigating the complex financial maneuverings involved in such significant corporate activities.
The developments surrounding this proposed acquisition will be closely monitored by investors, analysts, and market participants as it could redefine the competitive landscape of the logistics sector in the UAE..