RIYADH: Dur Hospitality and Taiba Investments said they would start preliminary discussions about a possible merger.
The pair made the disclosure in separate statements to the Saudi Stock Exchange on Sunday.
The statements come amid a wave of merger and acquisition activity in the Kingdom and wider Gulf region as corporations reposition themselves in the post-pandemic world.
Dur develops, owns and manages hotels, restaurants, recreational centers and travel agencies. It also provides services to Umrah pilgrims, in addition to developing residential, hotel and commercial buildings.
Its major shareholders include Assila Investments with 27.14 percent, the Public Investment Fund with 16.62 percent, and Mohammed Ibrahim Mohammed Al-Issa with 12 percent, the financial website said.
Meanwhile, Taiba is active in real estate; architectural and electrical contracting, maintenance and operation; and agricultural, industrial and mining activities.
Its major shareholders include Assila Investments with 16.73 percent, Mohammed Saleh Hamza Serafy with 15.55 percent, and Mohammed Ibrahim Mohammed Al-Issa with 7.41 percent, Argaam reported.
Bloomberg estimated the combined entity could be valued at around SR 9 billion ($2.4 billion).
Dur last month announced plans to add up to 3,441 new rooms to its portfolio. During the first quarter of 2021, the company reported a net profit after zakat and tax of SR 1.9 million, a drop of 83 percent year-on-year.
Taiba also announced it has signed an agreement with Shuaa Capital Saudi Arabia to buy out the two companies behind the Centro Waha hotel in Riyadh and the Centro Shaheen hotel in Jeddah in a deal valued at SR328 million, including tax.
During the first quarter, Taiba reported a net loss after zakat and tax of SR1.9 million, compared to a net profit of SR50.6 million in the first quarter of 2020.
