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Dur Hospitality Company announces the signing of a memorandum of understanding with Taiba Investments Company in relation to a proposed securities exchange transaction
| Element List | Explanation |
|---|---|
| Introduction | Further to the announcement made by Dur Hospitality Company (the “Company”) on the Saudi Exchange website on 03/11/1442H (corresponding to 13/06/2021G) in relation to the initial discussions with Taiba Investments Company (“Taiba”) relating to studying the merger of the two companies, and with reference to the Company’s announcement on the Saudi Exchange website on 10/08/1443H (corresponding to 13/03/2022G) regarding ceasing these discussions and not proceeding with studying the merger; the Company would like to announce that the two companies decided to resume discussions with respect to a potential transactions and that the two companies signed together a nonbinding memorandum of understanding (the “MOU”) relating to a potential share exchange (the “Proposed Transaction”) including their non-binding agreement on the structure and the exchange ratio of the Proposed Transaction |
| Date of signing the Memorandum of Understanding | 2022-12-17 Corresponding to 1444-05-23 |
| Memorandum Duration | Not applicable. |
| Name of the Counterparty | Taiba Investment Company |
| Name of Financial Advisor of Each Party | Dur Hospitality Company has appointed HSBC Saudi Arabia as its financial advisor, and Abuhimed Alsheikh & Alhagbani Law Firm as its legal advisor, in connection with the Proposed Transaction. Taiba Investments Company has appointed J.P. Morgan Saudi Arabia Company as its financial advisor, and Khoshaim & Associates as its legal advisor, in connection with the Proposed Transaction. |
| Major Terms in the Memorandum | Pursuant to the MOU, Dur and Taiba have agreed on the following nonbinding provisions: - The Proposed Transaction would be implemented through a share exchange offer made by Taiba (in its capacity as the offeror) to Dur’s shareholders (in its capacity as the offeree) for the purposes of acquiring all of Dur’s issued shares. The consideration payable by Taiba to Dur’s shareholders will be the issuance of new shares in Taiba in accordance with the Merger and Acquisition Regulations issued by the board of the Capital Market Authority and other relevant rules and regulations, which would result in the delisting of Dur, and it becoming a wholly owned subsidiary of Taiba. - Subject to the results of the reciprocal due diligence exercises, the shareholders of Dur will receive one (1) newly issued share of Taiba in exchange for every share they hold in Dur. The final exchange ratio will be determined in the definitive agreement of the Proposed Transaction. - The two companies have also agreed in the MOU that they will negotiate definitive agreements in relation to the Proposed Transaction that will set out the relevant commercial terms thereof, 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. It should be noted that the implementation of the Proposed Transaction is subject to the two companies agreeing a final binding agreement that determines the terms and conditions of the transaction. The terms and conditions of the final binding agreement will include obtaining all the required regulatory approvals and the approval of the extraordinary general assembly of each company on the transaction and its related matters. Therefore, the execution of the MOU does not mean the parties will reach a final and binding decision regarding the Proposed Transaction nor that the Proposed Transaction will be completed. |
| Related Parties | The initial analysis indicates that the Proposed Transaction involves related parties and directors who have a conflict of interest in relation to it. The Company will assess and evaluate this for the purpose of ensuring compliance with the relevant rules and regulations, and details of related parties and conflicted directors will be disclosed at a later stage. |
| Actions to be Taken by the Company during the Memorandum’s Duration | The parties will work to complete all the relevant requirements of the Proposed Transaction, including conducting due diligence and executing the definitive binding agreement and obtaining the regulatory approvals, and then present the Proposed Transaction to the shareholders of both companies in accordance with the applicable laws and regulations. |
| Approvals | The completion of the Proposed Transaction is subject to a number of regulatory approvals, including the approval of the Capital Market Authority, the Saudi Exchange and the General Authority for Competition, and the approval of the extraordinary general assemblies of the shareholders of Dur and Taiba, in accordance with the relevant regulatory requirements. |
| Additional Information | The Company will announce any material developments in relation to the Proposed Transaction in accordance with the applicable laws and regulations. |
The Capital Market Authority and Saudi Exchange take no responsibility for the contents of this disclosure, make no representations as to its accuracy or completeness, and expressly disclaim any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this disclosure, and the issuer accepts full responsibility for the accuracy of the information contained in it and confirms, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts or information the omission of which would make the disclosure misleading, incomplete or inaccurate.
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