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Mon 29 Sep 2014 09:55 AM

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Dubai's Emaar Properties says malls unit IPO priced at top of range

Shares to be sold at AED2.90 ($0.78), valuing the business at $10.3 billion

Dubai's Emaar Properties says malls unit IPO priced at top of range

Dubai's Emaar Properties confirmed on Monday that
the initial sale of shares in its malls unit priced at the top of the proposed
range amid massive demand from investors, making it the largest stock offer in
a Gulf Arab economy since 2008.

Shares in the initial public offer of Emaar Malls
Group (EMG) were priced at AED2.90 ($0.78) per share, giving
an overall sale value of AED5.8 billion ($1.58 billion), the parent firm
said in a bourse filing.

With a market value of AED37.7 billion upon
listing, it will become the third-largest stock on the Dubai Financial Market
when it begins trading on October 2.

It is the largest IPO in the Gulf since Saudi
Arabian Mining Co (Ma'aden) raised $2.47 billion from its flotation on the
Saudi stock exchange in July 2008.

Demand for EMG's offer had been expected to be high
since a statement on the day after the announcement of the offer's AED2.50 - AED2.90 price range disclosed that institutional investors had already pledged
to buy all the shares on offer to them.

A message from the banks arranging the transaction
said at the end of last week that bids from investors worth less than the top
price would not obtain any shares.

In total, the portion of shares allocated to
institutional investors was covered more than 30 times by orders from 470
accounts, while retail investors submitted orders worth over 20 times the
amount of shares available to them, the filing said.

Of the offer of 2 billion shares, equivalent to
15.4 percent of EMG, 70 percent will go to institutional investors and the
remaining 30 percent to retail accounts, it added.

Bank of America-Merrill Lynch, JP Morgan Chase and
Morgan Stanley were joint global coordinators of the offer, and four other
banks acted as joint bookrunners.