Dubai-based port operator DP World is returning to private ownership and delisting its shares from Nasdaq Dubai.
DP World’s parent company Port and Free Zone World has offered to acquire the 19.55 per cent of DP World’s shares traded on Nasdaq Dubai, returning the company to private ownership.
Upon offer acceptance, DP World will be 100 percent owned by Port and Free Zone World, which in turn is a wholly-owned subsidiary of Dubai World.
The company revealed that each DP World share will be acquired at USD 16.75, a 29 percent premium on the market closing price of USD 13.00 on Sunday.
DP World explained that the move would enable it to focus on its medium-to-long-term strategy of transforming from a global port operator to an infrastructure-led end-to-end logistics provider.
“The DP World Board has concluded that the disadvantages of maintaining a public listing outweigh the benefits. Delisting from Nasdaq Dubai is in the best interest of the company, enabling it to execute its medium to long-term strategy,” Yuvraj Narayan, Group Chief Financial, Strategy and Business Officer of DP World, said.
“DP World is focussed on the transformation of the group and takes a long-term view of investment returns and value creation. In contrast, public markets typically hold a short-term view. As a result of this gap, the DP World strategy is not fully appreciated by the equity markets, and consequently is not reflected in the company’s share price performance.”
“The global ports and logistics industry has been undergoing a significant transition as a result of the consolidation of the customer base and the vertical integration of several competitors. DP World must be able to continue responding effectively to this rapidly changing landscape and to invest in the future,” Sultan Ahmed bin Sulayem, Group Chairman and Chief Executive Officer of DP World, commented.
Bin Sulayem further pointed out that returning to private ownership will free DP World from the demands of the public market for short term returns which are incompatible with this industry.
“Our focus will continue to be on integrating our acquisitions with our global network of interconnected ports, logistics businesses and economic zones,” he added.
Over the recent period, DP World has made a series of acquisitions as part of its strategy to become a leading end-to-end logistics provider, including Unifeeder, P&O Ferries, Continental Warehousing, and Topaz Energy & Marine.