Saudi BinDawood delays listing to disclose related-party deals

Saudi Arabia’s BinDawood Holding Co. will delay its $600m initial public offering and give investors a chance to revoke their bids after discovering transactions with related parties that it hadn’t previously disclosed, according to people familiar with the matter.

The deal is now expected to be pushed back by about a week from its initial timeline, which would have seen final allotment of shares on October 1, the people said.

BinDawood said in a statement on Thursday that its IPO would be delayed pending additional disclosures and a spokesman for the company declined to comment further.

With the offering already more than 50 times oversubscribed, the delay is not currently expected to significantly affect the final pricing, the people said, asking not to be identified as the information is private.

BinDawood, one of Saudi Arabia’s largest grocery chains, was expected to price the listing at the top end of the range. The IPO, one of the first deals to be launched after the market regulator cracked down on excess lending to buy stocks, was set to value the company at about $3bn.

The company is working with Goldman Sachs Group, JPMorgan Chase & Co., GIB Capital and NCB Capital on the IPO.

Goldman Sachs and JPMorgan declined to comment, while GIB and NCB did not immediately respond to requests seeking comment.

The discovery of the related-party transactions is another hiccup in the share sale process. An early version of the prospectus revealed the underwriting value assigned to the deal by banks and the implied share price two weeks before the offering range was officially revealed.

The initial version of the prospectus showed that the banks underwriting the IPO valued the 20 per cent stake being offered for sale at SAR2.3bn ($614m). An updated version published a few days later removed the details of the underwriting value.