DUBAI (Reuters) – Dubai World is in talks to sell a stake in port operator DP World after it was approached by a regional private equity firm to sell a minority stake, driving its shares higher.
“DP World has been informed by its ultimate majority shareholder Dubai World that (it) has received an approach from, and is engaged in discussions with, a regional private equity firm which may or may not result in a transaction,” the port operator said in a statment on the Nasdaq Dubai.
The sale would largely come from free float, it added.
Its shares jumped as much as 5.6 percent in early trading.
DP World Chief Executive Mohammed Sharaf declined to comment on the talks.
Regional private equity firms with a solid deal pipeline for 2009 include Abraaj Capital, which owns a stake in low cost airline Air Arabia AIRA.DU. Abraaj has said it is planning $2 billion worth of deals this year as it looks to benefit from lower valuations across the Middle East, North Africa and Asia.
Abraaj executives were mot immediately available for comment.
“I think (DP World) need liquidity,” said Samer al-Jaouni, general manager of Middle East Financial Brokerage Co.
“We were expecting that we start seeing some deals, some big acquisitions in the region. It’s time for bargain hunters to get into the market, and the big companies need cash,” he said.
Shares in DP World were up 3.33 percent at 0713 GMT, trading at $0.372. The stock has fallen more than 65 percent over the past year.
(Reporting by John Irish and Raissa Kasolowsky; Editing by Sugita Katyal)