BARWA AND ALAQARIA ANNOUNCE FULL TERMS OF THEIR PROPOSED MERGER OFFER DOCUMENT PUBLISHED AND BARWA LAUNCHES OFFER FOR THE SHARES OF ALAQARIA

• Shareholder approval of the Proposed Merger will be sought at EGMs of Barwa and Alaqaria to be held on 30 March 2010; Barwa and Alaqaria urge their respective shareholders to attend the EGMs and approve the resolutions to be proposed
• Alaqaria’s Board of Directors recommends the Offer to its shareholders; Alaqaria shareholders urged to accept the Offer by completing the Form of Acceptance in accordance with the process set out in the Offer Document
• QATARI DIAR undertakes to support the Proposed Merger, by accepting the Offer and by voting in favour of the resolutions to be passed at the Barwa and Alaqaria EGMs in respect of its holdings of 45% and 27% of the share capital of Barwa and Alaqaria, respectively, and agrees to maintain a 45% equity shareholding in the enlarged Barwa group
• Proposed Merger to further enhance Barwa’s position as a leading regional real estate company with a combined market capitalisation of approximately QR11.1 billion / US$3.0 billion[1]

Doha, 4 March 2010 - Barwa Real Estate Company Q.S.C. (“Barwa”) and Qatar Real Estate Investment Company Q.S.C. (“Alaqaria”) today announced that, following the companies’ joint announcement of 10 January 2010 of the financial terms of the proposed combination of their respective businesses (the “Proposed Merger”), the full terms of the Proposed Merger have now been finalised.  The Proposed Merger will be effected through an offer (the “Offer”) by Barwa to acquire the share capital of Alaqaria in exchange for shares in Barwa. Barwa has published an offer document (the “Offer Document”) and announced that the Offer opens for acceptance today, Thursday 4 March 2010.

The Offer Document, which is being distributed to the shareholders of Alaqaria from today (with a summary of the same being distributed to the shareholders of Barwa), contains full details of the terms and conditions of the Offer and the Proposed Merger, along with instructions for Alaqaria shareholders wishing to accept the Offer.  The Offer Document is also available to shareholders on the dedicated merger website, www.barwa-alaqaria-merger.com.

Barwa and Alaqaria also announced details of their Extraordinary General Meetings (“EGMs”) that will give shareholders of both companies the opportunity to vote on the Proposed Merger.  Both the Barwa and Alaqaria EGMs will take place on Tuesday 30 March 2010 at Grand Hyatt Hotel, Doha at [4.00pm and 6.00pm][2], respectively.

The Offer opens for acceptance from today (Thursday 4 March 2010) and is expected to remain open until Wednesday 14 April 2010.  During this period, Alaqaria shareholders may accept the Offer by completing the Form of Acceptance in accordance with the process set out in the Offer Document. 

Barwa is offering to acquire, subject to the terms and conditions set out in the Offer Document, each Alaqaria share in exchange for 1.100 shares in Barwa.  

This exchange ratio values each Alaqaria Share at QAR 36.30 per share based on the closing share prices of Barwa and Alaqaria on 7 January 2010, the trading day prior to the announcement of the initial terms of the Proposed Merger, and represents a 30.6% premium over Alaqaria’s closing share price on 7 January 2010.

QATARI DIAR Real Estate Investment Company Q.S.C. (“QATARI DIAR”), the largest shareholder in both Barwa and Alaqaria, has undertaken to support the Proposed Merger by accepting the Offer and by voting in favour of the resolutions to be passed at the Barwa and Alaqaria EGMs. Furthermore, QATARI DIAR has agreed to maintain a 45% equity shareholding in the enlarged Barwa group through a contribution of land in the Lusail area that has been valued at QR2,392 million by DTZ. Such land is known as the as the Education and Medical District.

The board of directors of Barwa believes that this contribution of additional land by QATARI DIAR, which has been undertaken at the request of Barwa, is highly beneficial to the enlarged Barwa group, allowing it to increase its land reserves providing significant scope for future development.

COMMENT

Commenting on the Proposed Merger, Mr. Ghanim Bin Saad Al Saad, Chairman and Managing Director of Barwa and CEO and Managing Director of QATARI DIAR, said:

“I am delighted that the terms of our Proposed Merger have now been agreed and approved by the boards of directors of both Barwa and Alaqaria and by the relevant regulatory authorities and that we are now able to present this compelling transaction to our shareholders.  The businesses of Barwa and Alaqaria are highly complementary, both geographically and operationally, and the Proposed Merger will create a company with significant scale and depth across all real estate segments.  I strongly recommend that Barwa shareholders vote in favour of what would be a hugely beneficial development for Barwa.”

Sheikh Khalid Bin Khalifa Bin Jassim Al-Thani, Chairman and Managing Director of Alaqaria, said:

“This Proposed Merger of our two businesses represents a very exciting opportunity for Alaqaria and Barwa, and in particular for the shareholders of both companies.   The Offer, which represents a 30.6% premium to the value of the shares on 7 January 2010, recognises the inherent current and future value of the company and as such I would urge Alaqaria shareholders to accept Barwa’s Offer by completing the relevant forms in your shareholder pack, and to attend the company’s EGM on 30 March 2010.”

A COMPELLING BUSINESS COMBINATION

The boards of directors of Barwa and Alaqaria recognise the importance of combining their two businesses to form a Qatari real estate company with operations across the entire real estate value chain.  The Proposed Merger represents an excellent strategic fit, bringing together two large complementary Qatari real estate companies that operate in different segments of the real estate industry, including industrial housing, residential communities, commercial complexes, international mixed-use developed communities, a full service bank and various businesses offering real estate support services such as project management, properties and facilities management, and utility services.

The boards further believe that the enlarged Barwa group will be well-positioned to capture attractive domestic and regional opportunities and, the increased financial strength and scale will support future growth of the group.

The Barwa and Alaqaria boards of directors believe that the Proposed Merger is a compelling business combination which will enhance Barwa’s position as a leading regional real estate company with scale and enhanced financial and operational ability to capture a significant share of the market in Qatar and growth opportunities globally.

TERMS OF THE PROPOSED MERGER

The Proposed Merger will be effected through an offer by Barwa to acquire the shares of Alaqaria subject to the terms and conditions of the Offer Document. Following successful completion of the Offer, Alaqaria will become a subsidiary of Barwa and those Alaqaria shareholders who validly accept the Offer will become shareholders in Barwa. 

Barwa is offering to acquire, subject to the terms and conditions set out in the Offer Document, each Alaqaria share in exchange for 1.100 shares in Barwa.  This exchange ratio values each Alaqaria share at QAR 36.30 per share based on the closing share prices of Barwa and Alaqaria on 7 January 2010, the trading day prior to the announcement of the initial terms of the Proposed Merger, and represents a 30.6% premium over Alaqaria’s closing share price on 7 January 2010.

The terms of the Proposed Merger, including the exchange ratio, have been approved separately by the boards of directors of Barwa and Alaqaria.

It is important for Alaqaria shareholders to note that, if they have not taken all the necessary steps to accept the Offer, trading in the Alaqaria shares on the Qatar Exchange will be suspended indefinitely from 15 April 2010, subject to the affirmative vote of Alaqaria shareholders in favour of such suspension at the EGM, and therefore the ability to trade those shares is likely to be severely restricted following such suspension. Following completion of the Proposed Merger and the Offer, Barwa expects to cause Alaqaria to apply to the Qatar Financial Markets Authority and the Qatar Exchange for the delisting of the Alaqaria shares.

MANAGEMENT AND BOARD OF THE ENLARGED BARWA GROUP

Following completion of the Proposed Merger, it is intended that a representative of Barwa will be appointed to the board of directors of Alaqaria.  Alaqaria will continue to be operated as a separate business unit of the enlarged Barwa group. 

The composition and authority of Barwa’s board of directors is expected to remain unchanged following completion of the Proposed Merger. However, a resolution is proposed at the Barwa EGM to expand the Barwa board of directors to give effect to the new corporate governance regime in place in Qatar.  This step is being taken independently of the Proposed Merger.

No changes to the management of Barwa or Alaqaria are envisaged as part of the Proposed Merger.

SHAREHOLDER ACTIONS

Shareholders of Alaqaria are requested to take two actions:

—   Accept the Offer by completing the Form of Acceptance in accordance with the process set out in the Offer Document

—   Attend the Alaqaria EGM and vote in favour of the resolutions to be proposed at the EGM

Shareholders of Barwa are requested to take one action:

—   Attend the Barwa EGM and vote in favour of the resolutions to be proposed at the EGM

Details on accepting the Offer and on the Barwa and Alaqaria EGMs are contained in the Offer Document and are also available on the dedicated merger website www.barwa-alaqaria-merger.com.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

The following dates are indicative only and will depend, among other things, on the dates on which the conditions of the Offer are satisfied and whether the Offer period is extended beyond the anticipated closing date of 14 April 2010. 

* Subject to the Offer becoming unconditional in all respects, it is expected that trading in the Alaqaria shares will not be resumed following the indefinite suspension of trading expected to occur on or about 15 April 2010.

** The timetable for listing depends on the date on which the Offer becomes unconditional in all respects. It is expected that listing will become effective and dealings in the shares are expected to commence within 15 days following the closing date.

OTHER INFORMATION

Goldman Sachs International and The First Investor Q.S.C.C. are acting as financial advisers to Barwa, and J.P. Morgan is acting as financial adviser to Alaqaria. Linklaters LLP and Hassan Al Khater Law Office are acting as legal advisers to Barwa, and White & Case LLP and Badri and Salim El Meouchi are acting as legal advisers to Alaqaria.

Ends
 

CONTACTS

For more information on Barwa

Citigate Dewe Rogerson

Seb Hoyle / Ayman Hammamieh                        +974 452 8335

For more information on Alaqaria

Capital MS&L

Patrick Forbes / Farris Bukhari                           +974 588 5345

NOTES TO EDITORS

Important Notices

This announcement does not constitute an offer to sell or an invitation to purchase any securities or the solicitation of an offer to buy any securities, pursuant to the Offer or otherwise. Alaqaria shareholders are advised to read carefully the Offer Document which will contain the full terms and conditions of the Offer, including details of how the Offer may be accepted.

Goldman Sachs International which is authorised and regulated by the Qatar Financial Centre Regulatory Authority in the Qatar Financial Centre and by the Financial Services Authority in the United Kingdom, is acting exclusively as financial adviser to Barwa and for no one else in connection with the proposed transaction and will not be responsible to anyone other than Barwa for providing the protections afforded to clients of Goldman Sachs International or for providing advice in relation to the transaction, or matters referred to in this announcement or the Offer Document.

The First Investor Q.S.C.C. which is authorised and regulated by the Qatar Central Bank, is acting exclusively as financial adviser to Barwa and for no one else in connection with the proposed transaction and will not be responsible to anyone other than Barwa for providing the protections afforded to clients of The First Investor Q.S.C.C. or for providing advice in relation to the transaction, or matters referred to in this announcement or the Offer Document. 

J.P. Morgan, which is authorised and regulated by the Financial Services Authority in the United Kingdom, is acting exclusively as financial adviser to Alaqaria and for no one else in connection with the proposed transaction and will not be responsible to anyone other than Alaqaria for providing the protections afforded to clients of J.P. Morgan or for providing advice in relation to the transaction, or matters referred to in this announcement or the Offer Document

Barwa is not taking any action to make the Offer to persons in any jurisdiction outside Qatar. Further details in relation to overseas Alaqaria shareholders is contained in the Offer Document. Accordingly, copies of this announcement must not be, mailed or otherwise forwarded, distributed or sent in, into or from any jurisdiction where to do so would constitute a breach of securities laws in that jurisdiction. Persons receiving this announcement (including custodians, nominees and trustees) should observe these restrictions and should not send or distribute this announcement in, into or from any such jurisdictions.

FORWARD LOOKING STATEMENTS

This announcement and the Offer Document contain certain forward-looking statements with respect to Barwa and Alaqaria. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as “anticipate”, “target”, “expect”, “estimate”, “intend”, “plan”, “will”, “goal”, “believe”, “aim”, “may”, “would”, “could” or “should” or other words of similar meaning or the negative thereof. Forward-looking statements in this announcement and the Offer Document include, without limitation, statements relating to the proposed transaction and the Offer and the dates on which certain events relating to the same are expected to occur.  These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of any such person, industry results, strategies or events, to be materially different from any results, performance, achievements or other events or factors expressed or implied by such forward-looking statements. Many of the risks and uncertainties relating to forward-looking statements are beyond the companies’ abilities to control or estimate precisely, such as future market conditions and the behaviours of other market participants, and therefore undue reliance should not be placed on such statements. Forward-looking statements are not guarantees of future performance. They have not been reviewed by the auditors of Barwa or Alaqaria.

Forward-looking statements are based on numerous assumptions, including assumptions regarding the present and future business strategies of such entities and the environment in which each will operate in the future.  Shareholders are advised to read the Offer Document (and, in particular, the risk factors set out in part VII of the Offer Document) for discussion of the factors that could affect Barwa’s or Alaqaria’s future performance and the industries in which they operate.  Barwa and Alaqaria assume no obligation to, and do not intend to, update any forward-looking statements, except as required pursuant to applicable laws and regulations.

ABOUT BARWA

Barwa is one of the premier organizations in the State of Qatar. As the name "Barwa" or "Contractual Commitment" suggests, we are inspired by our vision of a glowing future for Qatar.

With business interests in real estate & project development, property & facility management, construction material production, environmental activities & health, banking & finance, hotels & resorts, technology & utility, knowledge & communications and agriculture, Barwa is driven by the conviction that people deserve a comfortable living and working environment.

With extensive operations in Qatar and around the world, we believe that every Barwa project is the seed for an incredible journey, where our greatest achievement is realizing the dreams of our stakeholders.

Barwa was established in 2005 and was listed on the Doha Securities Exchange (renamed as Qatar Exchange) in 2006. Barwa’s total shareholders’ equity was QR 5.3 billion and total assets were QR 29.6 billion as of 30 September 2009.

ABOUT ALAQARIA

Qatar Real Estate Investment Company, also known as Alaqaria, is a Qatari public shareholding company, with diversified activities in the real estate sector in the State of Qatar, and the largest real estate developer in the industrial cities of Qatar.

Alaqaria was established in 1995. The Company was one of the first to be listed on the Doha Securities Exchange (renamed as Qatar Exchange) and is rated Baa1 by Moody’s and BBB+ by Fitch. Alaqaria’s total shareholders’ equity was QR 2.0 billion and total assets were QR 6.6 billion as of 30 September 2009. Alaqaria owns 50% of ASAS Real Estate Co., 33% of Freej Real Estate Co., 8% of Mazaya Qatar Co. and 17% of Barwa Albaraha Co.

[1] Based on a share price of QR33.00 for Barwa and QR27.80 for Alaqaria as at 7 January 2010, and an exchange rate of USD 1 = QR3.64 as at 7 January 2010

[2] Note: Alaqaria believes an 8:00 start time for its EGM is too late.