Abu Dhabi's Aabar sets price for bourse retreat

Abu Dhabi state fund Aabar priced its delisting share buyback on Monday, dashing remaining investor hopes for a better price as it retreats from the stock market less than five years since its IPO.

The move takes Aabar, one of the most transparent groups in the secretive world of sovereign funds since its IPO in late 2005, back into the shadows and marks the first delisting of a local firm from the Abu Dhabi bourse.

Aabar Investments, more than 70 per cent state owned and the biggest shareholder in German carmaker Daimler with 9.1 per cent, said it would pay minority shareholders Dh1.45 a share, in line with Sunday's closing share price but down 19 per cent since it announced plans to delist in June.

Early on in the delisting process there was speculation that minority shareholders might be offered a price closer to the conversion price of Dh2.5 per share set for a convertible bond sale in May.

The fund's highest profile acquisition this year was a 4.99 per cent stake in UniCredit which made it the Italian bank's second largest shareholder.

"It is good that the offer has come out. If it's the best thing for minority shareholders, that remains to be seen," said Mohammed Yasin, Shuaa Securities chief executive.

"There are gaps in the law which needs to be fixed to address the interests of minority shareholders in a similar event," Yasin said.

The offer, worth about Dh1.64bn ($447m), will be valid from July 12 to August 1. The firm also asked the market regulator for permission to delay a July 26 shareholders meeting called to discuss the delisting until August 8.

Aabar surprised investors last month when it announced it was considering delisting.

The firm, with estimated assets of $10bn, is 72 per cent owned by Abu Dhabi government investment vehicle International Petroleum Investment Corp (IPIC) according to Reuters data.

The move allows the fund to disclose less about its aggressive investment strategy and its financial results.

"Whether you call it a sovereign wealth fund or a private equity firm, it's definitely the model of a fund rather than a public company. Disclosure requirements were putting pressure and it makes sense to delist," Yasin said.

In May, Aabar said its first-quarter profit leaped to Dh1.58bn, mainly due to derivatives income, after revising its year-ago result to a deep loss.

Aabar, launched in 2005 as a small energy company, sold most of its energy assets shortly after formation.

Paying $2.5bn last month for its UniCredit stake and $2.7bn last year for its holding in Daimler, Aabar also has 32 per cent of Virgin Group's space travel unit Galactic.

Aabar shares were trading down 2.07 per cent at Dh1.42 at 0833 GMT on the Abu Dhabi bourse.

The 2005 IPO raised Dh394bn and was oversubscribed 800 times at Dh1 per share plus 2 fils as subscription fees per share, according to Aabar's website.