Two retail offerings wrap: Fakeeh Care and Miahona both closed the retail portion of their IPOs on Tadawul’s main market yesterday, with each reporting a healthy subscription book.

FAKEEH CARE-

The retail tranche of healthcare provider Fakeeh Care’s IPO was 14.5x oversubscribed, Argaam reported, citing a statement from our friends at HSBC Saudi Arabia, which is the sole financial advisor and bookrunner. The final allocation of shares wrapped up yesterday with a minimum of three pieces per retail subscriber.

REMEMBER- The institutional offering was 119x oversubscribed, signaling strong investor appetite for the Riyadh-based healthcare provider’s offering, which is set to become the largest IPO so far this year.

The IPO has lured in UAE’s Adia: Abu Dhabi Investment Authority (Adia), the UAE’s largest sovereign wealth fund, has emerged as a key buyer in the IPO with a cornerstone investment of 1.04 mn shares, according to a supplementary prospectus. Alongside Olayan Saudi Investment — the other cornerstone investor — the two funds will together buy 1.99 mn shares out of a total of 4.98 mn shares on offer.

What’s next: Rump shares will be distributed proportionally among the subscribers based on the size of their demand compared to the total offering at an allotment ratio of 1.4%, according to Argaam. Fakeeh has yet to announce when trading will begin on its shares.

Background: Fakeeh Care is taking a 21.5% stake to market through an offering of both new and existing shares. The IPO was priced top of the range at SAR 57.5 per share, giving the family business a market cap of 13.3 bn post-listing, with the offering set to reel in some SAR 2.9 bn in proceeds.

ADVISORS- Our friends at HSBC are acting as sole financial adviser. HSBC is joint bookrunner together with our friends at EFG Hermes as well as ANB Capital. Moelis is advising the selling shareholders, while AlRajhi Bank, Saudi National Bank, Arab National Bank, SAB, Alinma Bank and Bank Aljazira are serving as receiving banks.

MIAHONA-

Water treatment outfit Miahona’s retail offering was 6.1x oversubscribed, with retail investors set to secure a minimum of 10 shares each, lead manager Saudi Fransi Capital said in a disclosure to Tadawul. A strong demand from retail investors will see the total offering for institutional investors fall to 80% despite it being 170x covered.

What’s next? Rump shares will be allocated to subscribers on a pro-rata basis to fulfill the remaining demand, with an allocation ratio of 11.6% for every subscribed share, according to the disclosure. Miahona’s date of listing is yet to be announced.

Background: The sole owner of Miahona — Vision Invest — is selling a 30% stakeonTadawul’s mainmarke t in a secondary share sale. The IPO was priced topof the range at SAR 11.5 per share, valuing the IPO at SAR 555.5 mn, and giving the company a market cap of SAR 1.85 bn post-listing. The selling shareholder will take home the proceeds from the offering after paying an estimated SAR 28 mn in fees associated with the transaction.

ADVISORS- Our friends at EFG Hermes KSA and Saudi Fransi Capital (SFC) are quarterbacking the transaction as financial advisor, bookrunner, and underwriter. SFC is also separately acting as the lead manager. SFC and Riyad Bank are receiving agents. Latham & Watkins is acting as legal counsel, while PwC is financial due diligence advisor, KPMG are serving as auditors, and Arthur D. Little as market consultant.

A RUNDOWN OF THE SAUDI IPO PIPELINE-

Other transactions that are now in the market or expected soon:

  • Riyadh-based aluminum products maker Al Taiseer Group Talco Industrial (Talco) plans to sell a 30% stake and has just priced its offering at the top of the range (see above);
  • Fintech startup Rasan is set to sell a 30% stake, pricing its offering at the top end of the range after its institutional tranche closed 129.1x oversubscribed;
  • Labor agency Saudi Manpower Company (Smasco) is selling a 30% stake and also priced its shares at the top of its initial range following strong institutional investor demand;
  • Hotels and resorts operator Boudl has filed to go public;
  • Fourth Milling Company will list before the end of June;
  • Singapore’s Olam Group is mulling the IPO of its Olam Agri subsidiary on Tadawul;
  • Hypermarket operator Lulu is said to be eyeing a dual listing on Tadawul and ADX;
  • Aster DM Healthcare looks set to spin off its GCC assets and seek a dual listing on Tadawul and in the UAE;
  • PIF-backed lender Riyad Bank is considering the listing of its investment banking arm Riyad Capital;
  • Nupco — a unit of the PIF — has reportedly tapped Rothschild & Co as financial advisor for its potential Tadawul IPO;
  • Budget airline Flynas is reportedly looking to go public this year.
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