DUBAI: Emaar Properties said institutional investors have committed to buying all the shares offered to them in the flotation of its shopping malls business only a day after the initial public offering (IPO) was launched.
Dubai’s largest real estate developer is aiming to raise as much as Dh5.8bn ($1.58bn) from the offer of shares in Emaar Malls Group (EMG), which is expected to be the Gulf’s biggest stock sale since 2008.
On Sunday, it offered 2 billion shares in EMG, representing 15.4 percent of the unit’s share capital, in a price range of Dh2.50 to Dh2.90 per share. It has said it aims to allocate at least 60 percent of the offer to institutions and no more than 40 percent to retail investors.
In a brief statement to the Dubai bourse late yesterday, Emaar said it had “received sufficient orders to cover the entire tranche allocated to the qualified institutional investors at all prices within the range of Dh2.50 to Dh2.90 per share”.
The offer closes on September 24 for retail investors and on September 26 for institutional investors, with EMG shares then listing on the Dubai Financial Market on October 2.
Some fund managers said the EMG offer is not particularly cheap, with brokerage Naeem Holding saying the price range suggested that EMG’s valuation was “a bit stretched”.
Naeem Holding estimated that at the mid-point of the range EMG would have a price-to-earnings ratio of 28.5, based on this year’s earnings. Reuters
