BAAN Holding signs 2 deals to buy real estate via capital hike

The first agreement is with AlOula Real Estate Development Co. (AlOula RED), involving the acquisition of 86 residential units in the Ajdan Waterfront Tower project, Al Khobar.

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The consideration includes issuing new shares in the company’s capital to AlOula RED or its affiliate.

The second agreement is with Abdulmohsen Alhokair Holding Group Co. for the acquisition of six properties, with three hotels, in Riyadh and Jeddah. This deal also involves exchange of new shares issued in the company’s capital.

The transactions are independent and not contingent upon each other but are intended to be finalized simultaneously, through a capital increase and share issuance for both parties.

The company aims to enhance its hospitality and real estate portfolio while expanding its footprint in key regions.

AlOula RED transaction includes 86 residential units in the Ajdan Waterfront Tower project, Al Khobar, on plot 12/2, master plan 356/2.

Alhokair Holding transaction includes four plots (2155, 2157, 2159, 2161, master plan 1578/A) with the Hilton DoubleTree Hotel in Riyadh’s Al Muruj district, a plot in Obhur South hosting the Radisson Blu Corniche Hotel in Jeddah, and plot 528/A, master plan 3/477/A, with the Holiday Inn Jeddah Gateway Hotel on Madinah Road, Jeddah.

AlOula RED transaction is valued at SAR 178.50 million, while Alhokair Holding transaction is valued at SAR 651.62 million. 

BAAN Holding stated that after the transactions are completed, current shareholders’ ownership will decrease by 49.2%, affecting their voting rights.

The company plans to complete both transactions simultaneously through a single capital increase and issuance of shares in one extraordinary general meeting (EGM). However, since each deal has specific preconditions, one transaction may not proceed before the EGM, and the company could decide to finalize only one. Any material updates will be announced accordingly.

The agreed share price for determining the number of shares to be issued is SAR 2.722, based on the three-month volume-weighted average price (3M VWAP) before the agreements’ signing date.

As of Dec. 26, 2024, the company’s market capitalization is SAR 774.90 million.

Alhokair Holding transaction involves a conflict of interest, as Chairman Sami AlHokair is a board member of Alhokair Holding and Faisal Al Malik is its CEO.

Major shareholders, including Abdulmohsen AlHokair and Al Hokair and Sons Holding Co., also indirectly control Alhokair Holding.

All related parties will comply with voting regulations for the Alhokair Holding transaction in board and general meetings.

Both transactions will conclude with the issuance of shares to the sellers, which must occur within one year of signing unless extended by mutual agreement.

The agreements can be terminated by written consent of all parties or by the company within 90 days of signing. If not terminated within this period, the agreements become binding.

The company can terminate either agreement via written notice if preconditions, excluding regulatory approvals, are not met or waived, or if unmet within one year of signing unless extended by mutual consent.

BAAN Holding stated it may terminate either transaction agreement under the following conditions:

If any representations or warranties by the sellers are found inaccurate or untrue before completion, if the sellers breach any obligations in the agreement, or if issues discovered during due diligence materially affect the condition, valuation, or status of the real estate assets at the company’s sole discretion.

Additionally, termination may occur if a government or regulatory authority orders expropriation, restriction, or suspension of the assets’ use or ownership before completion.

The company also outlined the approvals required to complete the transactions. These include approvals from the Capital Market Authority (CMA) and the Saudi Exchange (Tadawul) for one or both transactions, and clearance from the General Authority for Competition, if needed.

Approval is also required from the company’s board and shareholders to issue the shares, along with necessary consents from the Ministry of Commerce and the authority responsible for transferring real estate ownership.

Any additional approvals deemed necessary must also be secured.