Emaar Properties will commence its exceedingly anticipated initial public offer of at least 15% of its shopping malls and retailing unit on Dubai’s main stock market in September, and plans to record the shares in October.
The proffer would be one of the leading equity sales in the Middle East since 2008, underlining Dubai’s recovery from a credit crisis that forced many state-linked developers to stall projects, and some – though not Emaar – to restructure debt.
The pronouncement of the Initial Public Offering (IPO) conveyed the share price of the parent firm up 6.3% to a 15-week high in initisl trading. Emaar Properties had firstly divulged in March its objective to sell up to 25% of the unit in an offer possible to elevate 8 to 9 billion dirhams.
The emirate’s biggest realty developer will allocate 30% of the offer of shares in Emaar Malls Group (EMG) for individual investors, and 70% for institutional investors.
The IPO of EMG is a highlight for the advancement of the UAE capital markets as, for the first time, it merges institutional and individual shareholders in the same offering on the DFM.
The marketing procedure has started and a price for the IPO will be established by means of a book-building method. Whereas no formal pre-marketing took place, the spokesman averred.
The developer, in which the Dubai government owns about 30%, will pay a share totaling around 9 billion dirhams to its shareholders; 5.3 billion dirhams of that amount will come from the IPO profits, and 3.7 billion dirhams from a dividend previously paid by EMG to its parent.
EMG posted proceeds of 1.25 billion dirhams during the first six months of this year 2014, up 13% from a year earlier.