Emaar eyes Dh5.8 billion from IPO

Emaar Malls Group share sale begins, biggest since DP World’s $4.96b in 2007

Emaar Malls Group, or EMG, the malls and retail business subsidiary of developer Emaar Properties, seeks to sell two billion shares, representing approximately 15.4 per cent of the share capital, in a price range of Dh2.5 to Dh2.9 apiece to raise as much as Dh5.8 billion, the company said on Sunday.

The final price will be determined through a book-building process and will probably be set on September 29, the company said in a statement.

The initial public offering is the biggest in the UAE since port operator DP World’s $4.96 billion offering in 2007.

The share sale, which started on Sunday and ends on September 24 for individual investors and September 26 for institutional investors, could raise Dh5.8 billion at the top of the price range.

About 30 per cent of the IPO is being made available to individual investors and 70 per cent to qualified institutional investors, subject to demand, EMG said. “Existing Emaar Properties shareholders as at 10 September 2014 will have priority allocation to 10 per cent of the offer. Additionally, the Emirates Investment Authority is also given preferential allocation for five per cent of the shares offered for sale,” the company said.

The mid-point of the range will value the company at about Dh35.1 billion, Emaar said in the statement. The shares will list on the Dubai Financial Market on October 2.

Mohamed Alabbar, chairman of Emaar Properties, said the IPO is a milestone for EMG as both institutional and individual investors can now apply for shares and participate in the future success of the business.

“It has taken hard work from everyone involved at EMG to get to this point, and I would like to thank all of our employees for their dedication.”

“EMG has an excellent track record and we believe that our iconic assets, strong parent, experienced management team and the attractive consumer market in Dubai, make us well positioned to deliver further growth,” said Alabbar.

He said the IPO represented a significant step in the further development of the UAE capital markets with shares in EMG being offered to both individual and institutional investors. EMG is proud to be at the forefront of this innovation.

Individual investors who wish to subscribe to the IPO need to ensure that they have a National Investor Number registered with the DFM and a bank account.

EMG’s profit increased 24 per cent in the first half to Dh617 million, while revenue rose15 per cent to Dh1.26 billion.

The group’s flagship The Dubai Mall, the world’s largest by total built-up area, attracted 75 million visitors last year.

Emaar Properties, the parent company, plans to distribute Dh5.3 billion of the IPO proceeds as a dividend. It will make the payment as part of plans to distribute about Dh9 billion to its owners, including the Dubai government.

EMG also drew Dh918 million of a loan in September and paid Dh1.95 billion to the parent between July and December, according to the statement.

Subscription applications can be submitted through National Bank of Abu Dhabi, Emirates NBD, Mashreq Bank, Dubai Islamic Bank, FGB, Finance House, Union National Bank and Emirates Islamic Bank.

The minimum subscription in the shares offered for sale for the individual tranche is set at Dh10,000, with any additional subscription to be made in increments of at least Dh1,000. No maximum subscription in the shares offered for sale has been set.

Merrill Lynch, JPMorgan Securities and Morgan Stanley & Co International are the joint global coordinators for the offering. BofA Merrill Lynch, JPMorgan, Morgan Stanley, EFG Hermes UAE Limited, Emirates Financial Services, HSBC Bank Middle East Limited and National Bank of Abu Dhabi are the joint book runners.

Emirates NBD Bank and National Bank of Abu Dhabi are the lead receiving banks.

— issacjohn@khaleejtimes.com