ABU DHABI, 2nd August, 2023 (WAM) -- ADQ, an Abu Dhabi-based investment and holding company, and IHC Capital Holding LLC, a subsidiary of International Holding Company, have submitted an offer to Q Holding PJSC. The proposal combines ADQ's 100% shareholding of Abu Dhabi National Exhibitions Company (ADNEC) and its majority ownership interest in Modon Properties and IHC Capital's entire interest in Modon into Q Holding.

The move aims to create a regional leader in real estate, hospitality, events, catering and the development of urban projects.

The proposed transaction would create one of the region's largest real estate, hospitality, events, and catering platforms, enhancing Abu Dhabi's position as an integrated real estate and hospitality leader and complementing the emirate's economic transformation efforts.

The proposed combination will create substantial value by consolidating resources and operations, forming a larger and more efficient entity with an optimised cost structure. The consolidation of assets offers diversification benefits by mitigating industry-specific risks, securing more investment opportunities, and 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.

The combined group would have an implied market capitalisation of approximately AED44 billion (approximately US$12 billion) with an extensive portfolio of real estate developments, venues, land plots and hospitality assets.

Upon closing 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 AED 2.70 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 percent and 19.4 percent of the entire issued share capital of Q Holding. 

Mohamed Hassan Alsuwaidi, MD and 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." 

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 be significantly beneficial to the growth and the development of the industry. We envision this as a strategic alignment that will magnify our capacity for exceptional real estate development and effectively bridge the gap between tourism and real estate sectors 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.