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Dubai International Capital

Dubai International Capital (DIC) was established in October 2004 as the international investment arm of Dubai Holding. DIC, while focused on the private equity asset class, operates through three divisions:

  • Global Buy-Outs: Focused on secondary LBOs, primarily in Europe, but also in North America and Asia
  • MENA Investments: Manages a broad investment program across the Middle East & North Africa region, including LBOs, funds and co-investments, infrastructure, growth and development capital
  • Public Equities: Focused on investment in publicly quoted company through its DFSA regulated US$ 2 billion Global Strategic Equities Fund, by acquiring leveraged stakes in mega class companies.

The purpose of DIC is to create a return for its shareholder, Dubai Holding and its ultimate shareholders, the Ruling Family of the Emirate of Dubai. It is commonly thought an investment arm of the Government of Dubai.

Main Investors

Dubai International Capital, is one of a few large companies also known as the Dubai Fund, which is made up of companies sponsored by Sovereign wealth fund's. The three largest Middle Eastern sovereign wealth funds — defined by the Department of the Treasury as “government investment vehicles funded by foreign exchange assets, which manage those assets separately from official reserves” include Abu Dhabi, with $875 billion, Saudi Arabia, with $300 billion, and Kuwait, with $250 billion, according to data from Morgan Stanley.

Holdings

DIC's investments across its divisions include:

Global Buy-Outs:

  • The Tussauds Group - purchased in 2005 from Charterhouse Capital Partners for £800 million pounds ($1.5 billion). Subsequently sold in March 2007 to Merlin Entertainments for £1.03bn, though DIC now has a 20% in the combined company.
  • Doncasters Group Ltd - On 2 March, 2006, The Washington Post reported that DIC plans to buy Doncasters Group Ltd., a British precision-engineering company with plants in Connecticut and Georgia that make precision parts used in engines for military aircraft and tanks. The company said in a statement it is confident the U.S. government will approve its $1.2 billion offer. It said it was pursuing all U.S. regulatory approvals "as is customary for international business transactions of this nature.. The acquisition was completed on 7 May, 2006
  • Travelodge - purchased the UK budget hotel group in 2006 for £675m (1.02bn euros). Now the fastest expanding hotel chain in the Europe
  • Mauser Group - purchased the German industrial packaging company in June 2007 for Eur 850m - one of the world's leading specialist packaging firms.

MENA Investments:

  • Jordan Dubai Capital: A US$300 million private equity fund dedicated to investments in Jordan, launched in 2005.
  • Ishraq: A US$ 150 million investment company focused on delivering the budget hotel concept across the Middle East, established in 2005.
  • MENA Infrastructure Fund: Launched the US$500 million MENA Infrastructure as co-Anchor with HSBC in 2006.
  • Rivoli Group: DIC is rumoured to have acquired a substantial stake in the UAE-based luxury goods retailer.

Public Equities:

  • Daimler AG - acquired a 2% stake for $1 billion in German carmaker Daimler, making it the company's third largest shareholder in 2005.
  • HSBC Holdings Plc: acquired a substantial stake in the world's leading bank group in 2007.
  • EADS: acquired a 3.12% stake for $838 million in Europe's largest aircraft and defense manufacturer and Airbus parent company.
  • Mauser - acquired a stake for $1 billion
  • Sony - acquired a 3% stake for $1.5 billion

Leadership Team

  • Sameer Al Ansari - Executive Chairman & Chief Executive Officer
  • Anand Krishnan - Chief Operating Officer
  • Sylvain Denis - CEO of Private Equity
  • Robert Jhaveri - MD of Global Equities
  • Rabih Khoury - CEO of MENA Investments
  • Andrew Wright - Head of Legal

Advisers/Non-Executives

DIC has been agreesive in acquiring ex-CEO's of various western corporations, something which before DIC's emergence most would have been joining Carlyle Group, once called the "ex-presidents club" for its array of top advisers:

Failed purchases

Liverpool F.C.

On 3 December, 2006 DIC and English Premier League side Liverpool F.C. revealed that DIC were in exclusive negotiations to potentially buy the football club. Liverpool F.C. had been exploring options of investment in the club for some time after holding talks with a number of interested parties. DIC chief Sameer al-Ansari confirmed they were in talks with Liverpool officials regarding an investment: "Liverpool's investment requirements are well publicised. We hope we can agree a deal that will provide us with the opportunity to fund its needs both on and off the pitch," DIC chief executive Sameer al-Ansari told Bloomberg.com. DIC later pulled out of a takeover bid with Liverpool F.C after they tried to force Liverpool to come to a decision while the Liverpool board were considering an offer made by American tycoons, George Gillett and Tom Hicks, which they later accepted. However on 22nd December 2007, it was reported by a number of papers that Dubai International Capital may buy the shares of Gillett and Hicks as they continue to struggle to finance the club.

Sources in the Middle East have confirmed that DIC remain as keenly interested in buying Liverpool FC as they were one year ago. DIC last night refused to comment on the matter, but they appear best placed to resolve the financial problems affecting the club's competitiveness in the Premier League. A mooted valuation of £1 billion has been ridiculed, but an enterprise value of around half that figure might prove acceptable, allowing the Americans to exit with a profit of £75m each. They remain adamant in their intentions and hope to have a deal completed before January to purchase the team. Following their rumored purchase, DIC apparently plan to continue with the plans of the current owners to build a new stadium and improve the squad. Liverpool co-owner Tom Hicks has recently ridiculed rumors of him or George Gillett selling their shares to DIC, claiming that they are close to a deal to re-finance the club, though this is thought to be untrue. Liverpool fans have also lost faith in their American owners and many are calling for DIC to buy out the owners. But recently DIC reportedly made a £500 million offer to buy-out both Liverpool owners George Gillett and Tom Hicks, dismissing claims that they were only interested in buying out Tom Hicks shares. This news has been welcomed by many Liverpool fans. However, Tom Hicks has dismissed holding any talks with DIC and even DIC making a bid for his share. In terms of support for this renewed interest has been welcomed by lfc fan groups as their impressive portfolio and history of success in acquisitions has seen to be a more secure then their current American owners' business environment.

On 14 February 2008, the Daily Mirror newspaper reported that DIC have 'the outline of an agreement to purchase the Reds from George Gillett and Tom Hicks, and a deal could go through by mid-March'. On 4 March, DIC reportedly gave the two a period of 24 hours to accept the deal. It is thought that the figure for the bid is around £500 million, which would represent a substantial profit for both the American businessmen. However, reports suggest that the Liverpool co-owners have turned down the approach, although Hicks has not formally rejected the bid. The following day, tables were turned as Gillett is reported to be still interested in selling his fifty percent stake in Liverpool FC only if the right offer was made by DIC.

On 10 March 2008, Tom Hicks announced via the Liverpool F.C. website that he has terminated further discussions with DIC. Hicks was apparently not willing to allow DIC to be involved in football decisions.

On the 23 March, sources close to DIC announced they were within three to four weeks of completing a £400 million deal for the club. This story was also backed up with the news on 27 March that George Gillett was pursuing a club in Major League Soccer. This bid however ended in failure as Hicks reacted angrily to a DIC statement that they would soon own Liverpool FC outright and he blocked the sale of Gillett's shares.

The latest reports suggest that, since Manchester City Football Club were bought out by the Abu Dhabi United Group on 1 September 2008, DIC have placed an improved £500 million offer for the club. The rivalry between Abu Dhabi and Dubai is intense and with Abu Dhabi now owning a Premier League football club, speculation is rife that Dubai will now increase it's efforts to purchase the club they have long sought to own.

On 15 September, Premier League rivals Newcastle United have also been linked with the investment arm of Dubai Holdings which belongs to the Government of Dubai. Magpies owner Mike Ashley's revelation on 14 September that he intends to sell the Tyneside club has fuelled suggestions that DIC could be set to hold discussions with the billionaire. However, DIC have stated they are not planning a fresh bid for Liverpool nor are they in talks with any other side from England's top flight. The statement said: "Following inaccurate speculation regarding DIC and Liverpool FC, DIC can confirm that it is not involved in any negotiations to buy LFC and can confirm that it is not planning a fresh bid for LFC or any other football club. Nor is DIC or any other Dubai-based party aware of any consortium or vehicle involved in a bid. DIC has not mandated PCP to act for DIC or to act for them in any matter whatsoever. DIC would like to wish LFC and its fans a successful future.

Super Aguri

DIC were expected to support a bid by Magma group for the Oxfordshire based Formula 1 team Super Aguri, but are reported to have had second thoughts over the deal and pulled out of it.

References

External links

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