Dubai's Damac delays pricing of London IPO by four days

Developer is concerned the verdict on Dubai's bid to host Expo 2020 may interfere with trading
DAMAC PLANS: Damac is building 12,500 units across its markets in the Gulf Arab region, Egypt and Lebanon, most set to be handed over by early 2013.(Getty Images)
By Reuters
Wed 27 Nov 2013 10:15 AM

Dubai-based property firm Damac Real Estate has extended roadshows on a London IPO by four days because the verdict on Dubai's bid to host World Expo 2020, due on Wednesday, may interfere with trading, a source familiar with the matter told Reuters.

The company was scheduled to price a $500m IPO on Tuesday's close in London within a range of $12.25 to $13.25 per Global Depositary Receipt.

However, Dubai is currently bidding to host the World Expo trade event in 2020, and as the result will be announced on Wednesday, it was decided that the risk to the aftermarket was too large.

"This will give people time to factor in the Expo result," a source said.

Dubai is the frontrunner to host the World Expo in 2020, and if it wins the bid, property prices are likely to rise in the emirate.

However, because shares have risen in recent times in anticipation of a successful bid, if the event is awarded to another location, Dubai stocks are likely to fall.

In addition, Damac has reduced the deal size to $400m and fixed the final price at $12.25, the bottom of the price range.

As per the new schedule, the shares will begin trading the following week.

Citigroup and Deutsche Bank are joint global coordinators and bookrunners. Samba Capital and VTB Capital are co-lead managers.

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