Damac holds IPO price down in test of investor appetite
DUBAI REALTOR PLANNING TO SELL 18.8% OF THE NEW COMPANY TO RAISE AT LEAST $ 500M
Damac Real Estate Development Ltd is preparing to price its London initial public offering near the bottom of its range, sources said.
The offering was oversubscribed at $ 12.25 to $ 13.25 per global depositary receipt, the people said, asking not to be identified because the pricing isn’t public. The company said on November 14 it was targeting a range of $ 12.25 to $ 17.25 per GDR, creating a homebuilder valued at as much as $ 3.7 billion.
Al Firdous Holding and Sahira Co., controlled by Damac Properties Development Co. founder Hussain Sajwani, are planning to sell as much as 18.8 per cent of the new real estate company to raise at least $ 500 million.
The initial public offering, the first for a Dubai- based developer since the emirate’s real estate market downturn in 2008, is set to test the appetite of global investors for the city’s recovering property market. Damac was valued by analysts at $ 3.9 billion to $ 5.4 billion, three people briefed on the process said on November 4. The company said on November 14 the valuation range would be between $ 2.7 billion and $ 3.7 billion.
“It was expensive to us even at the lower end of the range,” Ali Taqi, a portfolio manager at A/ T Capital Management in Dubai, said yesterday. “We couldn’t justify the valuation,” he said. Citigroup and Deutsche Bank AG along with Samba Capital and Investment Management Co. and VTB Capital Plc are managing the share sale.