Taiba, Dur sign non-binding MoU to study potential share swap deal

Dur Hospitality Co. and Taiba Investments Co.  signed on Dec. 17 a non-binding memorandum of understanding (MoU) for a potential share swap deal, including a non-binding agreement on the relevant structure and exchange ratio, the two companies said in separate statements to Tadawul.  

Taiba appointed JP Morgan Saudi Arabia Co. as its financial advisor, and Khoshaim & Associates as legal advisor for the proposed transaction. Meanwhile, Dur appointed HSBC Saudi Arabia as financial advisor, and Abuhimed Alsheikh & Alhagbani Law Firm as legal advisor.  

Following the MoU, Taiba and Dur agreed on several non-binding provisions, including that the exchange offer will be made by Taiba to Dur’s shareholders to acquire all their issued shares.   

Taiba will issue new shares, in accordance with the Merger and Acquisition Regulations issued by the Capital Market Authority and other relevant rules and regulations, leading to the delisting of Dur and it will become a wholly-owned subsidiary of Taiba.  

Dur shareholders will receive one newly issued share of Taiba in exchange for every share they hold. The final exchange ratio will be determined in the definitive agreement of the proposed transaction.  

The two companies also agreed that they will negotiate definitive agreements, including the final structure of the proposed transaction and the final exchange ratio.   

The MoU also includes customary provisions that regulate confidentiality, exclusivity, restrictions on some material actions, restrictions on trading and other related matters.  

The transaction is subject to the two companies agreeing to a final binding agreement that determines the terms and conditions of the transaction.   

The companies also need to obtain all the required regulatory approvals, in addition to the approval of the respective extraordinary general assembly.  

The MoU does not imply the parties will reach a final and binding decision regarding the proposed transaction.  

The initial analysis indicates that the transaction involves related parties and directors who have a conflict of interest. The companies will assess and evaluate this for the purpose of ensuring compliance with the relevant rules and regulations. Details of related parties and conflicted directors will be disclosed at a later stage, the statements said.  

The parties will work to complete all the relevant requirements, including conducting due diligence, executing the definitive binding agreement, obtaining the regulatory approvals, and presenting the proposal to the shareholders of both companies.  

Any material developments will be announced, in accordance with the applicable laws and regulations, the statements said.  

On June 12, 2021, the boards of directors of Dur and Taiba approved starting preliminary discussions to study a possible merger, Argaam earlier reported.  

In March 2022, the two companies decided to end the talks on a potential merger.