LONDON/DUBAI, 22 November 2006 — Dubai-based Oger Telecom, a company controlled by Lebanon’s Hariri family, canceled a $1.25 billion initial public offering yesterday, blaming regional stock markets which are sliding for a second time this year.
A source close to the situation told Reuters the company did not get the price it wanted. “It went down to the wire,” the source said.
Oger scrapped the sale of shares and global depositary receipts (GDRs) even though it was oversubscribed throughout the price range, the company said in a statement to the London Stock Exchange.
Oger had hoped to raise $150 million from the listing of shares and GDRs in London and on the Dubai International Financial Exchange, a new bourse set up to attract foreign firms.
The price range for the offer was $1.15 to $1.42 a share and $11.50 to $14.20 per GDR, with each GDR representing 10 shares. At the mid-point of the range Oger had a market value of around $5.7 billion.
“...In the light of increasingly challenging and volatile regional market conditions, the company and principal selling shareholders deemed that it was no longer advisable to proceed,” Oger said.
Stock markets across the world’s biggest oil exporting region have tumbled this month in their second downturn of 2006. The domestic Dubai Financial Market index has fallen 11.6 percent since Nov. 1 and the Saudi market, the region’s largest, has lost a fifth of its value since Oct. 29.
Oger Telecom was probably trying to protect investors in the IPO, said Phillip Khoury, head of research at EFG-Hermes, a Cairo-based investment bank.
“With the way markets are these days, they could not have afforded the risk of a short-term downturn when trading began,” Khoury said.
