Habtoor Group scraps planned $1.6bn IPO

Khalaf Al Habtoor says planned 2013 listing “postponed”, cites “moral issue” of going public “at this time”

Khalaf Al Habtoor.

Khalaf Al Habtoor.

Al Habtoor Group, which had planned to list next year in what would have been one of the largest initial public offerings (IPOs) in the UAE’s recent history, has decided to postpone the move.

“After a thorough evaluation I have decided to postpone the IPO,” chairman Khalaf Al Habtoor said in a statement.

“It is a moral issue not taking the group public at this time. I will continue to focus on best practice and growing the company in a sustainable way.”

Earlier this year, Al Habtoor said he was planning to raise up to US$1.6bn by floating on the NASDAQ Dubai in either March or September 2013.

The news will come as a blow to the NASDAQ, which lost one of only three companies listed on its exchange earlier this year. The size of the planned IPO had been expected to boost UAE markets, which have not seen a major listing take place since Drake & Scull International’s move to go public back in 2008.

In the statement issued on Tuesday, Al Habtoor revealed that Grant Thornton, which had been hired to advise on the IPO, had valued the company at US$6.06bn.  

That valuation excluded four properties in Beirut, and one in Hungary, as well as the group’s shareholding in Habtoor Leighton Group and “several other investments in public shareholding companies”.

The statement also included a projection of group earnings for this year, which are expected to grow by 16 percent to “in excess of” US$191.8m. It is the first time the Al Habtoor Group has publicly announced its earnings. 

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Posted by: Solly

The salient point may not be the timing issue, but the belated realisation (that western advisors would be largely blind to) that listing a group with a slice of income arising from alcohol sales, particularly on a local exchange, but also for many ethical investors, is problematic.
Wait for the dust to settle and see when the Habtoor Group divides into, say, "hospitality" and others, with the latter being floated - or not at all, if the non-beverage part is of insufficient scale to warrant an IPO.

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