DP World of Dubai to Make an Initial Offering
(Dealbook, Oct 22) DP World confirmed Sunday that it will sell 20 percent of its shares, worth at least $3.5 billion, next month in what will be the Middle East’s largest initial public offering.
The sale of shares in the Dubai government-owned company is expected to usher in a series of billion-dollar initial public offerings, as the ruling Maktoum family of Dubai sells off stakes in its business empire, which spans fields like air transportation, real estate and banking.
DP World became the world’s third-largest port company after its acquisition of the British-based Peninsular and Oriental Steam Navigation Company for $6.8 billion in 2006. Political opposition in the United States forced DP World to sell terminals it had acquired in America through the purchase.
The initial offering will be the biggest to be tried in the Middle East, beating the $2.7 billion share sale of the Saudi Telecommunications Company in 2002 and the $1.8 billion offering by the Saudi Kayan Petrochemicals Company this year.
The issue will open for retail buyers on Nov. 4, closing on Nov. 15. Institutional investors will be able to bid for shares up to Nov. 21. The initial offering is intended as a book-building issue, which allows the market to determine the price, within a range.
The listing could invigorate the Dubai International Financial Exchange, known as DIFX, which has struggled to attract interest since the exchange was started in 2005 as part of a plan to make Dubai a financial center to rival Hong Kong, New York and London.
“DP World is definitely an anchor listing, and so will help attract more anchor listings and will also allow smaller companies to increase their visibility on the DIFX,” Per E. Larsson, chief executive of Borse Dubai, the parent of the exchange, told reporters.
DIFX will be rebranded as Nasdaq DIFX after it and the Nasdaq Stock Market entered into a complex ownership deal last month in a bidding war for the Nordic exchange operator OMX.
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