Arab Finance quoted Deutsche Bank as saying that Aabar Investments' offer to acquire 70% stake in Arabtec Holding would be difficult to turn down and cut its price target on shares of Arabtec to factor in dilution from the deal.

The brokerage said that refusing an Abu Dhabi government entity as a main shareholder could jeopardize Arabtec's position in the Emirate or reduce the likelihood of seeing the Dubai receivables getting repaid.

Last month, Arabtec said that Aabar would acquire 70% stake in Arabtec for USD 1.7 billion. Shares of Arabtec have been pressured by sustained speculation that the deal will not go through. The stock was down 0.44% at AED 2.28 by 0845 GMT.

Earlier, Mr Riad Kamal CEO of Arabtec was quoted as saying that the company's merger with Aabar would go ahead and there was no truth to speculation that the deal was off.

Deutsche Bank cut its price target on shares of Arabtec to AED 3 from AED 4.50, but maintained its buy rating on UAE's biggest contractor by market value.

The brokerage said that "It all comes down to accepting significant dilution in exchange for a deal securing the balance sheet and providing a sustainable platform for expansion."

(Sourced from Arab Finance)