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Emaar hires Rothschild, HSBC, others for mall float

dubai mallEmaar Properties, owner of the world’s biggest mall, hired HSBC Holdings and Emirates NBD  as bookrunners for the initial public offering of its retail arm, with Rothschild as financial adviser, five people familiar with the matter said.

National Bank of Abu Dhabi and EFG Hermes Holding Co. will also be bookrunners on the sale of between 25 percent to 30 percent of the malls unit on the Dubai Financial Market (DFM), the people said, asking not to be identified as the information isn’t public. The company will seek to raise about $2 billion through the sale planned for September, according to the people.

The IPO, by the developer of the world’s tallest tower, would be the largest in the Middle East and Africa since 2008. Emaar said in March it planned to raise as much as $2.45 billion with the sale of a 25 percent stake in the business in London and on Nasdaq Dubai.

An Emaar spokeswoman didn’t immediately respond to e-mailed questions. Spokesmen for HSBC, Emirates NBD, NBAD and Rothschild declined to comment, while a spokesman for EFG didn’t respond to a phone call.

Emaar shares rose 1.7 percent to close at 9.64 dirhams in Dubai, taking this year’s advance to 39 percent after doubling in 2013.

The share sale will be open to institutional and retail investors, and will be marketed to institutions in the Gulf region, Europe, the U.S. and Asia, the people said. Morgan Stanley (MS) and JPMorgan Chase & Co. (JPM) are global coordinators for the deal, while Bank of America is joint lead manager with the other two U.S. banks, the people said. Officials for Morgan Stanley and Bank of America declined to comment, as did a spokeswoman for JPMorgan.

The local portion of Emaar’s IPO will have a tranche aimed at institutional investors and a second portion for retail buyers.

Middle Eastern companies are taking advantage of rebounding stock markets and asset prices to raise funds through IPOs and secondary offerings. Dubai’s DFM General Index has surged 44 percent this year, while Abu Dhabi’s benchmark ADX General Index gained 13 percent.

Emaar’s IPO would follow the sale by Dubai-based Marka, which is seeking to enter the U.A.E.’s fashion and restaurant businesses.

Emaar’s mall and retail business posted a 20 percent increase in 2013 revenue to 2.84 billion dirhams ($770 million), while its Dubai Mall, the world’s largest by areas, attracted 75 million visitors.-Bloomberg