KUWAIT: The Kuwait Stock Exchange surged yesterday on news that the country’s wealthiest family has agreed to sell its majority stake in Americana food company in an expected multi-billion-dollar deal. The normally dormant Kuwait bourse was trading up 1.5 percent at 5,196 points after the market announced an initial conditional agreement had been reached to sell the Kharafi family’s 69 percent stake in Americana.
Al-Khair National for Stocks and Real Estate, which manages Kharafi family stocks, informed the market that a consortium of Gulf investors is set to acquire the stake. The Gulf consortium is represented by leading Dubai businessman and chairman of property giant Emaar, Mohamed Al-Abbar. The statement gave no value for the deal but said it is conditional to due diligence investigation and regulatory approvals.
It also gave no date for closing the deal. Established in 1964, Americana, or Kuwait Food Company, is the parent group of more than a dozen major food brands like Kentucky, Costa Cafe and TGI Friday’s. It owns 1,630 outlets and employs 63,000 workers in Middle East and North Africa region. It also has 17 factories in the region and abroad and produces a variety of food products. Americana has been in the news for several months after Saudi-based food company Savola reportedly offered around $4 billion to acquire the firm. That offer was rejected.
Gulf stock markets rebounded in early trade yesterday, following Asian stock markets higher as oil prices extended their rally into a second day. Dubai’s index climbed 2.1 percent in the first 45 minutes of trade, with local investor favorites Arabtec and Drake & Scull trading up 2.6 amd 1.8 percent respectively. Blue chips also bounced back with Emaar Properties up 4.1 percent. In Abu Dhabi, the index gained 1.1 percent with the largest lender by market value, First Gulf Bank, jumping 3.5 percent. Dana Gas was up more than 4.0 percent.
Some traders and fund managers think the Gulf equity markets have now largely factored in economic pain expected this year due to governments’ austerity policies, so investors may continue to bargainhunt cautiously for stocks with attractive valuations and dividend yields, as long as oil does not fall back sharply. Doha’s benchmark jumped 1.1 percent in the first 20 minutes of trade with Industries Qatar and Ezdan Holding up 1.9 and 3.1 percent. But Gulf International Services nosedived its daily limit of 10 percent for a second session in a row. The oil driller announced on Wednesday it swung to a net loss of 20.9 million riyals ($5.6 million) in the fourth quarter; QNB Financial Services had forecast a profit of 278.9 million riyals.
