Emaar Properties is looking to raise as much as $1.5 billion from the sale of shares in its development unit in Dubai’s first major listing since 2014.
The assets of Emaar Development include 49 units in Dubai’s Burj Khalifa, the world’s tallest tower and a number of projects in Dubai’s prime districts.
At the top end of the range, the newly listed company would be valued at 27.6 billion dirham ($7.5 billion), a 14.5 percent premium to its estimated net asset value of 24.1 billion dirhams, which Reuters reported on Oct. 2.
Emaar Properties plans to sell a 20 percent stake or 800 million shares in its real estate development business, less than expected after it had received shareholder approval to sell up to 30 percent of the unit
The company aims to distribute aggregate dividends of no less than $1.7 billion during the next three financial years, with the first post-IPO dividend to be paid in the third quarter of 2018.
Emaar had said the IPO offers the opportunity for its shareholders — including the UAE Government — to unlock the true value of the development business, and allows potential investors to invest in a pure-play property developer.
REASONABLE PRICE RANGE
Emaar Properties had said last week that the size of the offering was expected to be similar to that of the Emaar Malls IPO, which had raised expectations among analysts that it could command a premium of 20 percent.
Marie Salem, director capital markets at investment banking firm FFA Dubai Ltd, said it was a reasonable price range for investors compared to earlier expectations for the valuation.
Ayub Ansari, senior analyst at Manama-based Securities & Investment Co, said the price range implies a one-off dividend between 0.64 to 0.77 dirhams per share for Emaar Properties shareholders, assuming full payout from the proceeds.
Shares of Emaar Properties were up 0.72 percent in late morning trade.
Emaar Chairman Mohamed Alabbar said on Oct. 24 that the company expected to pay a special dividend to shareholders by December or January from the proceeds of a partial listing of Emaar Development.
Bank of America Merrill Lynch, EFG Hermes , Emirates NBD Capital PSC, First Abu Dhabi Bank and Goldman Sachs International are joint global coordinators for the offering. Rothschild is acting as financial advisor.