Mall operator Arabian Centres has priced its initial public offering at the lower end of an indicative price range and is set to raise SAR2.47bn ($659m), two sources said.
That would make it the second biggest IPO in Saudi Arabia since National Commercial Bank raised $6bn in 2014, Refinitiv data showed.
The company priced its IPO at SAR26 per share, the sources said, against a price range of SAR26 to SAR33 per share for the sale of 95 million shares.
The institutional tranche of the public share sale has been covered, said one of the sources and a third source.
Owned by Fawaz Alhokair Group, the offering will be the first in the kingdom under Rule 144a, which allows the sale of securities primarily to qualified institutional buyers in the United States.
Arabian Centres owns 19 malls, making it the leading owner and operator of shopping malls in Saudi Arabia by total gross leasable area as of the end of 2018, a sale prospectus released on April 28 showed.
Arabian Centres plans to expand its operations to 27 malls within four years, including four in the next 12 months, CEO Olivier Nougarou said this month.
Four cinemas are already under construction, with 12 more to come over the next two years, he added. A decades-long ban on movie theatres was lifted last year.
Gross proceeds from the sale of new shares would be used for debt repayment, the document said. The deal comprises 65 million existing shares being sold by the current shareholders and 30 million new shares, with a listing scheduled for late May.
The Saudi index has gained over 14 per cent this year, making it one of the Gulf’s best performing markets in 2019.
The Tadawul, Saudi Arabia’s main stock exchange and the Middle East’s largest bourse, will join MSCI’s emerging market index in May this year, heightening interest among foreign investors in the Saudi market.
Riyadh has been encouraging more family-owned companies to list in a bid to deepen its capital markets as part of reforms aimed at reducing reliance on oil revenue.
Fawaz Alhokair, a major shareholder in Fawaz Alhokair Group, was detained in an anti-graft probe in which Saudi authorities held dozens of senior officials and businessmen at Riyadh’s Ritz Carlton Hotel in late 2017.
Many, including Alhokair, were released after being cleared or reaching settlements with the government.
Morgan Stanley, Samba Capital, NCB Capital, and Goldman Sachs are the joint financial advisers and bookrunners for the IPO. Other bookrunners include EFG Hermes KSA, Citigroup, Emirates NBD Capital, Credit Suisse, and Natixis.