“Aslak” signs an agreement to acquire 40% of the shares of “Al-Raeda”

United Wire Factories Company signed a non-binding agreement to acquire 40% of the shares of Al-Raida for Industrial Investment.
The company said in a statement on the Saudi Tadawul: The acquisition is through the issuance of new shares to the shareholders of Aslak.
The two parties agreed to proceed with the completion of the potential transaction and the Trustee to conduct due diligence in relation to the proposed transaction.
The company had announced on the Saudi Tadawul website, on 04/30/1445 AH (corresponding to 11/14/2023 AD), the signing of a memorandum of understanding with Al-Raeda Industrial Investment Company.
According to the final evaluation of the pioneer and the results of the due diligence examination, the two parties will agree on the exchange factor that determines the new Aslak shares issued for the benefit of the pioneer’s shareholders for each share they own in the pioneer.
It noted the agreement to set the price of Aslak shares for the purpose of the proposed deal at 29.7 riyals per share, which was calculated on the basis of the average daily volume-weighted price (VWAP) for the last (60) trading days from the date of signing the non-binding agreement.
The non-binding agreement begins from the date of its signing and is effective for a period of (6) Gregorian months, which can be extended by agreement of both parties.
A financial advisor has not been appointed for the current stage, and Aslak will announce at a later time any developments regarding the appointment of its financial advisor.
The two parties agreed on a number of terms and conditions, including restrictions on the business of both parties from the date of signing the non-binding agreement, a number of guarantees and compensations, the method of completing the swap transaction, and other terms and conditions generally accepted in such deals.
ASLAK will conduct due diligence and sign agreements related to the potential transaction if both parties agree to its terms in time to accomplish this.
The potential deal is subject to the approval of the relevant official authorities, the approval of the Extraordinary General Assembly of Aslak to increase the capital for the purpose of acquisition, and the approval of the Ordinary General Assembly of Al-Raeda Company for the acquisition deal, as follows:
1. Obtaining the approval of the Capital Market Authority regarding Aslak Company’s request related to increasing the capital.
2. Obtaining the approval of the Saudi Stock Exchange (Tadawul) to list the compensation shares.
3. Obtaining a no-objection from the General Authority for Competition regarding the acquisition deal.
4. Obtaining the approval of the required majority of Aslak shareholders on the acquisition decisions in the extraordinary general assembly related to the acquisition deal.
5. Obtaining the approval of the required majority of Al-Raeda Company’s shareholders on the acquisition deal in the Ordinary General Assembly of Al-Raeda Company, as it is a fundamental deal in accordance with the rules of the Capital Market Authority.
The deal is also subject to a number of preconditions specified in the agreement, including conditions related to the target company’s contracts and business and other conditions specified by the two parties.