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30 November 2023

Dubai Group eyes Oman unit stake sale

By Reuters

Dubai Group may sell its 41 per cent stake in Oman National Investment Corp (Onic), three sources familiar with the matter said.

Based on a share price of 0.544 rial at 0745 GMT, the 41 per cent stake in Onic is worth more $90 million (Dh330m).

In October, Dubai Group said it would reassess its investment strategy and was reviewing options to sell its stake in Malaysia's Bank Islam. In December, it sold a seven per cent stake in Egyptian investment bank EFG Hermes for $120m.

"We expected some rethinking on the strategy and on which assets to divest and this is proving to be consistent with that," said Ali Khan, Managing Director and Head of Brokerage at Arqaam Capital.

"We will likely continue to hear about other assets being divested that don't fit the group's strategy."

Talks with Onic are in the preliminary stage and no written mandate has been agreed upon, the sources said.

However, it could be difficult for Dubai Group to get a "significant" premium for its stake as Onic stock has risen on hopes the Oman investment firm may reach a separate deal to sell one of its insurance subsidiaries, one of the sources said.

"Onic has been in the market trying to sell its insurance subsidiary and the stock has been rising on that," the source said without revealing more information about the deal. Onic shares have risen more than 60 per cent in the past six months.

A potential stake sale will have "no impact" on Onic's short-term prospects, said Mohammed Hassan, General Manager of United Securities.

Executives at Dubai Group and Onic did not comment.

Dubai Holding bought a 35 per cent stake in the Omani firm in 2007 from Shuaa Capital through its investment arm, Dubai Financial, a unit of Dubai Group.

Dubai Holding has about $1.9 billion of debt maturing in the first half of 2010.


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