Largest Mideast IPO values DP World at $21.6 bln

DUBAI - Dubai will raise as much as $4.32 billion by selling 20 percent of DP World in the Middle East’s largest initial public offering from Sunday, valuing the world’s fourth-biggest container port business at up to $21.6 billion.

By (Reuters)

Published: Sun 4 Nov 2007, 1:35 PM

Last updated: Sat 4 Apr 2015, 11:10 PM

The state-owned firm, which handled 6 percent of the global container traffic last year, will sell 2.822 billion shares at between $1 and $1.30 per share, DP World said in a statement. The offer includes a so-called greenshoe option that allows DP World to sell an additional 498 million shares to meet demand.

The total offer will represent 20 percent of DP World’s 16.6 billion existing shares, according to Deutsche Bank, one of four lead managers of the IPO.

“On the expectation that the IPO is a success, you should consider that the greenshoe would be exercised,” Iain Macleod, managing director for infrastructure at Deutsche Bank, told reporters.

If it sells the shares, including the greenshoe option, at the top end of the price range DP World will raise $4.32 billion.

That will surpass the $2.72 billion Saudi Telecom Co. raised in its public share sale in 2003 as the Middle East’s largest IPO. Saudi Telecom also sold shares to government funds taking the total raised to $4.08 billion.

DP World’s final offer price will be determined by a process of book building.

A person familiar with the plan told Reuters on Sept. 11 that DP World would sell 20 percent of its shares this year in an IPO that would value the company at as much as $22 billion.

The sale of existing shares closes on Nov. 15 and the company will list on the Dubai International Financial Exchange (DIFX), which is set to become an affiliate of US bourse Nasdaq Stock Market Inc under a deal agreed last month.

The IPO could breathe life into the DIFX, a bourse at the heart of Dubai’s ambitions to become a global financial centre but one that has barely attracted investor interest after a 2005 launch trumpeted as the birth of the Arab Hong Kong.

The sale is open globally to institutional investors, nationals of six Gulf Arab oil producers and residents of the United Arab Emirates. Dubai is the second-largest member of the UAE federation.

Cash from the sale will be used to pay off Islamic bonds, Sultan Bin Sulayem, chairman of DP World’s parent Dubai World told reporters when the IPO was announced last month.

Dubai sold $3.5 billion of Islamic bonds to help finance DP World’s $6.8 billion acquisition last year of British rival P&O.

Bonds of Dubai’s Ports, Customs & Free Zone Corp (PCFC), which mature in January and are convertible into shares in any DP World IPO, have been rising on growing interest in owning stock in the company.

More news from Business