Investcorp Capital, which specializes in capital financing and services in the field of alternative investments, intends to offer approximately 29.34% of its shares on the Abu Dhabi Securities Market with a total valuation of $1.1 billion.
The company said in a statement issued today that it is in the process of selling approximately 643 million ordinary shares (29.34% of the total capital) with a nominal value of $0.50 (i.e. 1.84 UAE dirhams) per share. This brings the company's initial valuation in the offering to about $1.1 billion, according to Al Sharq's calculations.
The company explained that the shares it intends to offer to investors are divided into 321.5 million new shares that will be issued, in addition to the sale of 321.5 million shares by the company’s sole shareholder, Investcorp, from its holdings.
With this IPO, Abu Dhabi joins in benefiting from the IPO boom in the Middle East region in light of the increasing investor demand to snap up shares in new listings, despite the weak IPO activity globally, as Middle East IPOs have raised $30 billion since the beginning of 2022... compared to $35 billion in the previous year. Europe, according to Bloomberg calculations.
The offering - which is the first of its kind in the region - comes at a time when geopolitical concerns prevail in the general climate, as global investors fear the spread of conflict in the Middle East, which has caused a decline in most of the region’s markets since the outbreak of the conflict.
The Dubai market index declines at the largest weekly pace since May 2022
Subscription for the institutional segment is expected to open on November 2, and will close on November 8. Subscription for the individual segment will extend from November 2 to November 9. The company expects to be accepted for listing on the Abu Dhabi Securities Market on November 17, 2023.
Pledge to invest in the IPO
Investcorp Capital and the selling shareholder have entered into a cornerstone investment agreement with IVC Strategic Investments, under which they are committed to purchasing shares in the IPO at the final offering price. The company said the latter has committed to paying approximately $250 million in the IPO.
Investcorp Capital is an independent alternative investment holding company of Investcorp with approximately US$50 billion in assets under management (including assets managed by third parties). Investcorp Capital focuses on the equity financing and capital allocation services sectors.
Investcorp, which backed luxury goods companies such as Tiffany & Co and Gucci, delisted itself from the Bahrain Stock Exchange in 2021 after nearly four decades of listing there, citing low trading volumes and a desire to expand quickly.
In 2017, Mubadala Investment Company (Abu Dhabi’s sovereign fund) acquired 20% of Investcorp’s shares.
Investcorp Capital intends to pay a semi-annual cash dividend of at least 8% (in equal instalments) for the financial year ending June 30, 2024, based on total net profits of $1.235 billion, equivalent to AED 4.536 billion, as at the listing date, which was augmented by preliminary proceeds. Resulting from the offering, the company expects to distribute semi-annual dividends in February and October of each year.
