JEDDAH, 12 May 2005 — The Saudi Arabian Capital Market Authority (CMA) has approved the allocation process of Saudi Dairy and Foodstuff Company (SADAFCO) shares to investors in the wake of the recent successful initial public offering (IPO). Solid support for the company was evident from the first day of the subscription period and all shares had been subscribed for by the close of the second day.

In the event, the IPO was 6.5 times oversubscribed. More than one million subscribers deposited almost SR3 billion to buy 11.4 million SADAFCO shares and now the company is poised to move forward with the support of a significant number of new shareholders who will share in the company’s success.

Individual investors will receive just two shares each. Offered at SR260 per share the total investment of SR520 may well, if they follow the example of the immediate upward movement experienced by former IPO’s issued over the last year or so, experience good percentage returns, but small monetary profit.

SADAFCO has a strong track record of profitability and revenue growth and is the leading ice cream and long-life dairy, beverage and food producer in the region.

One small investor, Abu Omar, said that he foresaw oversubscription. “Previous IPO’s seemed very successful. I invested in Bank Albilad and made very substantial returns,” he said. “I thought that the examples previous successes would get people turning out to invest in huge numbers and maybe this time it would not be so good.” Omar said that he felt comfortable not joining the rush this time as the shares were offered at what he saw as a high price. “I am sure the stock will rise, but the hassle of the investment process for the returns on a couple of shares simply isn’t worth it.” That view was echoed by financial consultant Ammar El Mufti who has monitored the recent swathe of IPOs. Seeing that only 30 percent of the company would be on public offer, he anticipated that it would be oversubscribed, and that the allocation would be low.

Describing himself as a “small to medium” investor, El Mufti said many were disappointed with the allocation. “The application for the issue was restricted to just four receiving banks,” he said. “For the small investor, going through the process of opening accounts and depositing money was not worth the pain and hassle.”

El Mufti felt that the very small investor would probably not be discouraged. “In due course it could be discouraging to many, but some will always take on the hassle for a few hundred riyals.”

SADADCO, UIC (major selling shareholder) and the rest of the selling shareholders, the National Commercial Bank (NCB) and the receiving banks thanked all those people who participated in the IPO and helped to make it a success.

The public exposure associated with listing on the SASE will raise the company’s profile. It also adds the additional responsibility of meeting SASE listing rules which require the timely disclosure of material information that could have an impact on the share-price.