Dubai construction group Arabtec tumbled on Sunday after the firm announced it will sell a 70 per cent stake to Aabar Investment, pending shareholder approval. Arabtec fell 4.2 per cent in early trading, while Aabar climbed 5 per cent.

'At first glance, the deal looks very dilutive: our 2010 (estimated) EPS (earnings per share) would be cut by 61 percent,' Deutsche Bank wrote in a research note.

'The deal could be led by the Dubai government, as part of some assets reshuffling with Abu Dhabi. While Dubai has no equity stake in Arabtec, it is the largest debtor through the receivables,' the note said.

On November 25, Dubai sent shockwaves through global markets when it said it would request a standstill on billions of dollars of debts linked to the state-held holding firm Dubai World and its property units Limitless and Nakheel.

Wealthier neighbour Abu Dhabi had bailed Dubai out to the tune of $25 billion in the past year.

Dubai's index fell 0.6 per cent to 1,827 points. Union Properties dropped 2.7 per cent. Abu Dhabi's benchmark edges up 0.1 per cent to 2,777 points.

'The deal is very good for Aabar and Arabtec, but it remains to be seen how good it will be for minority shareholders,' said Matthew Wakeman, EFG-Hermes managing director for cash and equity-linked trading, earlier in the day.

'I don't think investors will panic too much - Arabtec needs 75 percent of shareholders to approve the deal, so the company will have to sell it to them.' Arabtec's shares hit a six-week closing high on Thursday.-Reuters