ADQ and IHC Capital have offered to combine their shareholdings in Modon along with ADQ’s shareholding in Adnec Group into Q Holding to create a regional leader across the real estate, events and hospitality sectors.
ADQ, an Abu Dhabi-based investment and holding company, and IHC Capital Holding LLC (IHC Capital), a subsidiary of International Holding Company, plans to combine ADQ’s 100% shareholding of Abu Dhabi National Exhibitions Company PJSC (Adnec), as well as its majority ownership interest in Modon Properties PJSC (Modon), and IHC Capital’s entire interest in Modon into Q Holding.
The combined group would have an implied market capitalisation of approximately AED44 billion (approximately $12 billion) with an extensive portfolio of real estate developments, venues, land plots and hospitality assets.
Integrated realty and hospitality leader
The proposed transaction would create one of the largest real estate, hospitality, events, and catering platforms in the region that would enhance Abu Dhabi’s position as an integrated real estate and hospitality leader, complementing the emirate’s economic transformation efforts.
It promises to create substantial value by consolidating resources and operations, forming a larger and more efficient entity with an optimized cost structure. The consolidation of assets offers diversification benefits, by mitigating industry-specific risks and securing more investment opportunities, as well as enhancing supply chain efficiencies that will improve profitability.
The larger balance sheet and robust cash flows will deliver the combined entity with increased financial flexibility, enabling more strategic investments, debt reduction, and potential shareholder distributions. The accumulated benefits of this combination would be directly available to public investors, positioning the new Q Holding as an attractive value proposition for future investment.
Convertible instrument
Upon closing of the proposed transaction, Q Holding will issue to ADQ and IHC Capital a convertible instrument that would convert into approximately 9,491 million ordinary shares in the capital of Q Holding.
The price at which the convertible instrument will convert into shares in Q Holding is AED2.70 per share. The offer implies an equity valuation of approximately AED18.5 billion for Q Holding. Following completion, ADQ and IHC Capital would respectively own approximately 38.7% and 19.4% of the entire issued share capital of Q Holding.
Mohamed Hassan Alsuwaidi, MD & CEO at ADQ, said: “This proposed offer provides a unique opportunity to generate value by bringing together key real estate and hospitality assets, creating an Abu Dhabi champion that fuels its ambitions. The combined assets would benefit from increased scale and new revenue opportunities that will position it well for future growth.”
Strategic alignment
Syed Basar Shueb, IHC’s Chief Executive Officer and Managing Director, said: “We firmly believe that the proposed transaction of consolidating Abu Dhabi’s leading tourism and real estate assets into Q holding will prove to be significantly beneficial to the growth and the development of the industry. We envision this as a strategic alignment that will not only magnify our capacity for exceptional real estate development but also effectively bridge the gap between tourism and real estate sectors that is poised for further growth and expansion.”
If the Board of Q Holding recommends proceeding with the transaction, it will be subject to shareholder and regulatory approvals.-- TradeArabia News Service