MAF in the run for Dunia

|TAP Special| UAE finance company Dunia may be for sale and Dubai’s Majid Al Futtaim Holding is believed to be among the suitors.

According to Bloomberg, MAF Holding and KKR & Co. are among companies weighing a bid for the Abu Dhabi consumer finance firm.

MAF already has a personal finance business, which offers the Najm credit cards and other products. There could be good synergy between Dunia and MAF in this respect. American multinational KKR is a private equity firm, specializing in leveraged buyouts and manages private equity investment funds.

Dunia’s shareholders, which include sovereign wealth fund Mubadala Development Co. and Temasek Holdings Pte unit Fullerton Financial, are seeking about four to five times book value for the company, Bloomberg said quoting two people familiar with the developments. That may value Dunia at about $800 million to $1 billion, they said. Bids for the business are due this week, the people said.

Majid Al Futtaim, also known as MAF, is working with Citigroup Inc. on its planned bid, two of the people said. International investors are seeking to team up with local parties to adhere to local regulations, which allow foreign firms to own a maximum of 40 percent of a consumer finance company in the United Arab Emirates, they said. Other regional banks and private-equity firms are also weighing bids, the people said.

Representatives for Mubadala, Majid Al Futtaim, Citigroup and KKR declined to comment. A representative for Fullerton didn’t respond to requests for comment.

According to Bloomberg, Dunia shareholders hired Morgan Stanley to explore a sale of the company, people with knowledge of the matter said July 1. The company is run by former Citigroup banker Rajeev Kakar, who is also regional chief executive officer of the central and Eastern Europe, Middle East and Africa region for Fullerton.

Dunia’s profit rose 61 percent to 191 million dirhams ($52 million) and it had assets of 1.6 billion dirhams in 2014, the company said in March. It was established in 2008 and offers financial products including loans, credit cards, deposits for non-individual customers, and finance for small businesses.