- DubaiDino at the Dubai Mall – EMG’s flagship property in the emirate.
- Associated Press
Retail giant Emaar Malls Group priced its $1.58 billion initial public offering–the biggest in Dubai in seven years–at the top of the range amid strong demand for its stock.
Morgan Stanley is a joint global coordinator for the offering and also one of the joint bookrunners. Patrick Delivanis, its head of investment banking for the Middle East and North Africa, tells the Wall Street Journal about the robust interest that the EMG IPO generated. And why it’s important to continue to bring to market only those companies that are well prepared and with solid investment fundamentals.
WSJ: There was strong demand for the EMG IPO. Why?
Mr. Delivanis: “We have registered significant demand from ultra high-net-worth and institutional investors from across the region and around the world. The high level of interest was due to an attractive investment case, the right structure of the deal and supportive market dynamics. Additionally, the management team is first class and investors appreciated this.”
WSJ: Will the EMG IPO be a trendsetter in terms of big regional conglomerates spinning off assets instead of selling shares at the group level?
Mr. Delivanis: “Regional and international investors are anticipating further offerings from Emaar Properties and other regional and U.A.E.-based companies, but will continue to be discerning.”
“It is thus important that we bring to market companies who are well prepared in order to maintain positive momentum and to sustain the improvement in local market activity that we have recently witnessed. We do believe that subsidiary spin offs/monetizations like EMG provide an opportunity for all shareholders including those at the parent level to crystalize value.”
WSJ: How do you see the regional IPO market going forward?
Mr. Delivanis: “The EMG offering provides validation for Dubai’s economic strategy which is focused on the development of the retail, tourism and services sectors, and sets the stage for further issuance not only from Dubai, but also from the broader region.”
“Investors are becoming more comfortable, not only with the positive fundamentals of the region, but also with the steady structural enhancements in the local markets which facilitate investment and trading.”
“The recent MSCI upgrade has also played a role in bolstering the market in that it has attracted both passive and active funds from sophisticated international investors and provided additional liquidity and market momentum as a result.”
WSJ: Are you working on any other IPO mandates?
Mr. Delivanis: “We are working on a number of opportunities across the region. Investor confidence has been on the rise of late now, but in order to maintain this positive momentum, it is important to continue to bring to market only those companies that are well prepared and with solid investment fundamentals.”
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