The Abu Dhabi Securities Exchange (ADX) listed Eshraq Investments has agreed to acquire 100 percent shares of Goldilocks Investment Company, the ADGM-domiciled investment fund, managed by SHUAA GMC, a subsidiary of SHUAA Capital.
Goldilocks deploys an opportunistic long-term investment strategy, also known as constructive activism, and has generated a net return of 243 percent since its inception and 76 percent returns in 2021 through direct investments in equities and other undervalued and mispriced opportunities. It generated $28.5 million income in 2021 on the back of its investments in profitable and strong cash flow generating UAE-based companies.
Under the terms of the transaction, Eshraq will issue new shares for swapping Goldilocks investors in exchange for their shares in it. The transaction values Eshraq at 40.6 fils per share, a 37.8 percent premium to Eshraq’s closing price as of March 28, 2022. Post the acquisition transaction, Eshraq Investments will have combined assets of more than $1.03 billion.
The non-cash transaction has received approvals from Securities and Commodities Authority (SCA) and Eshraq’s Board of Directors. The transaction is subjected to the approval of Eshraq’s shareholders and other customary regulatory approvals and the satisfaction of conditions precedent.
The Board of Directors at Eshraq Investments said that “The proposed transaction is a win-win for both Eshraq and Goldilocks shareholders, particularly in terms of investment portfolio diversification and increased liquidity. Most importantly, the acquisition of a high-performing fund like Goldilocks will enable Eshraq to increase its profitability, improve its share price and positions the company for strong business performance, while creating tangible and long-term sustainable value for Eshraq shareholders. We also expect the transaction to give us access to profitable deal flow at an early stage.”
