Global bought shares in 2005 for 252 fils per share and sold them this week for 470 fils per share. Not a bad rate of return, depending on exactly when they bought the shares, that works out to 25-40% per year.
Global shares were relatively busy (790,000 shares traded) on the DFM on Wed but price was unchanged at 11.50 dhs. Price rose 1.7% on Thursday.
Reuters 21 November 2007:
Global Nets $34 million from selling its stake in Nibras Holding
Kuwait's Global Investment House (GLOBAL) said it had sold its 88% stake in Nibras Holding Co. for a net profit of 9.6 million dinars ($34.99 million).
The investment bank sold 44 million shares at the price of 470 fils per share through an auction at the Kuwait Stock Exchange for a total of 20.7 million, it said in a statement received on Wednesday.
The net profit will be reflected in the company's fourth-quarter results, the statement said.
Global, which is also listed in Bahrain and Dubai (DFM) and has branches and affiliates in five countries, bought its stake in Nibras in 2005 at the average cost of 252 fils per share.
As of September 30, the company had asset under management worth 2.35 billion dinars.
I presume this refers to the sale of Nibras shares by Global, and it says that the reported news is correct. There were several denials from other companies today, so this would be a refreshing change.
I get an error when trying to open the orginal disclosure on DFM's website though ...
DFM 22 November 2007:
(GLOBAL): Assuring the news released in one of the local news papers today 22/11/2007
I found this news in an article about Al Madina 2007 Q3 results. Note that it says Al Madina ("the company") made an offer, so presumably Al Madina bought the shares as reported above, but that's not confirmed by the reports in the previous posts.
Arab Times 14 November 2007:
It was also reported that the company had made a preliminary offer to Global Investment House (GLOBAL) to purchase 44,000,000 shares in Nibras Holding Company at 470 Kuwaiti fils per share. Note that the number of shares mentioned above represents 88 percent of the capital of Nibras Holding Company.
Al Madina (ALMADINA) was established in 1980 under the name Modern Printing Press with a capital of KD 600,000 or $2,000,000. In Jan 2005, the company’s name was changed to Al Madina Finance and Investment Company in accordance with the provisions of the Commercial Companies Law Number 15 of 1960 and the succeeding amendments to the said law. The company was registered at the Central Bank of Kuwait as an Islamic investment company with a paid up capital of KD 15,000,000.
Another article from the same day which indicates Al Madina was the buyer. However, all the references I've found to the actual sale, only say that Global sold the shares, without naming the buyer.
Arab Times 14 November 2007:
44 million Nibras shares for sale
GIH acting as vendor
KUWAIT : Kuwait Stock Exchange (KSE) announces that on Nov 20, 2007, an auction will be held for the sale of 44,000,000 shares of the Nibras Holding Company, which represents 88 per cent of the company’s capital, at an initial price of 470 fils per share and a total value of KD 20,680,000. An agreement was reached between Global Investment House (GLOBAL) and Al Madina Finance and Investment Company (ALMADINA) to act as vendor and as principal buyer respectively.
As the agreement between the above buyer and seller is preliminary, other bidders are also invited to make their bids. Those willing to enter the auction should deposit 10 percent of the total price mentioned above latest by 10 am on Nov 20, 2007. The winner of the bid has to pay the rest of the amount by 10 am on Nov 21, 2007 and the Kuwait Clearing Company is not entitled to recover the amount if the bidder is not paying full price for the deal at the time and date mentioned.
... all the references I've found to the actual sale, only say that Global sold the shares, without naming the buyer.
For example (no mention of Al Madina that I can see)...
Arab Times 21 November 2007:
Global nets KD 9.6m from Nibras deal
KUWAIT (KUNA): Global Investment House (GLOBAL) announced Wednesday that it sold its 88 percent stake in Nibras Holding Company, recording a net profit of KD 9.6 million ($34 million) which will be reflected in the fourth quarter 2007 results.
In a press release, Global’s Executive Vice-President Omar El-Quqa said that 44 million shares were sold at the price of 470 Kuwaiti fils per share, through an auction at Kuwait Stock Exchange for a total amount of KD 20.7 million ($75 million).
El-Quqa pointed out that principle investments were key income generators for the company. He said the portfolio included a list of quality investments in private as well as listed companies with a strategy to create value for these companies and exit them upon reaching the target. Accordingly, the selling of Global’s share in Nibras “is as per the preset strategy and goals to augment profitability for our (Global’s) shareholders.”
He added that this deal “reflects the strength and diversity of our principle investment portfolio which consists of valuable assets that include listed and unlisted securities. Historically, Global has generated an average annual return exceeding 18 percent from its principle investment portfolio, thanks to the professional team that manages it.” El-Quqa affirmed the role Global played in creating value for the companies it invested in through engagement in the board and the experience and support provided to the executive management.
Global bought its stake in Nibras in 2005 at the average cost of 252 fils per share. Since then, Nibras adopted a very aggressive strategy by acquiring new schools in Kuwait, increasing the number of students to 5300, developing new premises for the Fahaheel National Private Indian school and acquiring a license to operate a private school in Qatar.
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