GEMS to choose London IPO over stake sale

DUBAI: GEMS Education is set to move ahead with an initial public offering, rebuffing interest from a private equity firm for a stake in the school operator backed by Blackstone Group LP, according to people with knowledge of the matter.

The Dubai-based education provider may announce plans as early as this week to list in London, the people said, asking not to be identified because the matter is private.

GEMS owners – founder Sunny Varkey, Blackstone, Fajr Capital Ltd and Bahrain’s Mumtalakat Holding Co – had been approached by a private equity company to buy a stake, they said. GEMS planned to hire investment banks including Bank of America Corp, Credit Suisse Group AG, JPMorgan Chase & Co and Emirates NBD PJSC to manage the IPO, people familiar with the matter said in December. The company could be valued at about US$4bil or more, people said last year. A spokesman for GEMS said the company doesn’t comment on rumors or speculation.

IPOs have become more popular in the United Arab Emirates with Abu Dhabi’s oil giant and Dubai’s biggest property developer selling shares in units. Middle East-based billionaire Bavaguthu Raghuram Shetty hired Evercore Inc to advise on a potential share sale for his financial-services company, people said this month. By contrast, international buyout firms have made limited investments in the region due to the size and political sensitivity around deals, according to a 2017 report by the MENA Private Equity and Venture Capital Association.