JEDDAH, 2 August 2006 — The initial public offering (IPO) of Emaar Economic City (EEC), which has been heavily oversubscribed since it opened on July 22, will close today.
EEC, a consortium headed by Dubai-based global real estate major Emaar Properties and a number of investors from Saudi Arabia, offers a total of 255 million shares at a nominal value of SR10 each. The fully underwritten IPO is open only for Saudi nationals.
As at the end of the eighth day of subscription, 2,313,005 applications were received from 8,426,322 subscribers, with the amount subscribed already reaching SR6.19 billion.
Net proceeds from the offering will be used by EEC to finance the largest single largest private sector initiative in Saudi Arabia, the SR100 billion ($26.6 billion) King Abdullah Economic City (KAEC).
“King Abdullah Economic City marks the first time that the private sector is contributing heavily to a socio-economic project of this nature,” said Nidal Jamjoom, chief executive officer, EEC. “The overwhelming response of the public to the IPO underscores their trust in the project, which will ensure a new era of economic prosperity for the Kingdom,” he added.
The IPO is fully underwritten with SABB acting as lead underwriters and Riyad Bank and NCB acting as sub-underwriters. HSBC are the exclusive financial advisers on the IPO with SABB appointed as lead manager. KPMG Al-Fozan & Bannaga are the registered auditors and reporting accountants while Baker & McKenzie are the legal advisers.
Meanwhile, Emaar Properties has signed a share purchase agreement with Singapore mainboard-listed Wheelock Properties (Singapore) Ltd. (Wheelock Properties), a property investor and developer with a focus on luxury residences, to acquire its UK-based subsidiary, Hamptons International (Hamptons) in an all-cash deal worth AED562.45 million ($153.05 million).
Hamptons, UK’s premier realtor and property management consultant, is a 100 percent owned subsidiary of Wheelock Properties. Hamptons has more than 1,000 staff and sells, lets and manages over 15,000 properties every year. The acquisition covers Hamptons’ UK offices and its joint venture with CB Richard Ellis Hamptons International in the UK and Hamptons International Oman.
Emaar will be filing notification of the intended deal with the Financial Services Authority (FSA).
“The acquisition of Hamptons, which follows our recent buy of the second largest private home builder in the US, John Laing Homes, is a forward vertical integration for Emaar and a reiteration of our Vision 2010 to become the most valuable group in the world,” said Mohamed Ali Alabbar, chairman, Emaar Properties.
He added: “The deal scales up our core competencies in product sales in the international arena and takes Emaar’s market presence beyond the Middle East and North Africa (MENA) region, the Indian Subcontinent and North America to include Europe, and thus, practically the entire Western hemisphere. The acquisition extends our global outreach and will build our international network of offices to over 130 by year 2009.”
Alabbar noted that Hamptons, with over 130 years of experience in buying, selling, leasing and mortgage brokerage in a number of international markets, will be a strong strategic partner for Emaar.
“Emaar can leverage on Hamptons’ global pool of customers to further broaden the group’s base of international clientele whilst Hamptons can capitalize on Emaar’s global presence to extend its reach and establish itself as a leading global brand in property sales, management, and development services,” he said.
“Emaar’s acquisition of Hamptons gives us a tremendously strong platform to replicate our business success within the UK, Europe and other regions across the world,” said Jonathan Seal, CEO, Hamptons International Residential Development and Investment. “This is an outstanding opportunity to rapidly expand our presence in Oman and beyond, and will present excellent opportunities for the business as a whole.”
Mark Anderson, CEO, Hamptons International Residential Agency, added: “This union demonstrates the strength and reputation of our brand. Hamptons and Emaar share a common goal of international growth and business expansion into new territories. Emaar will provide us with the opportunities and platform for our need to expand our market reach.”