Dubai-Based DP World To Raise $3.5B With IPO
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DP World, the Dubai-based owner of ports from Britain to China, plans to raise as much as $3.5 billion in the Middle East’s second-biggest initial share sale, two people with knowledge of the proposal said.
The government-owned company may offer up to 30% of its stock as early as next month, said the people, who declined to be identified because the proposal is private. The emirate has spent $49 billion in two years for stakes in London Stock Exchange Group Plc, MGM Mirage, and more than a dozen other companies to reduce its dependence on energy exports.
“This would be the long-awaited opportunity for investors to own equity in one of Dubai’s crown jewels,” the head of credit research at HSBC Holdings Plc in Dubai.
Dubai is vying with Qatar to be the region’s dominant financial center. The IPO, second only to Saudi Telecom Co.’s $4.1 billion sale in 2003, would value the company at about $10.5 billion. It is subject to approval by the emirate’s ruler, Sheikh Mohammed bin Rashid al-Maktoum.
DP will be listed on the Dubai International Financial Exchange, to be renamed as a Nasdaq Stock Market Inc. venture after the American company agreed to buy a 33% stake last month. As part of that deal, state-owned BorseDubai is taking a 28% stake in LSE, where DP’s shares also may be sold.
An IPO is one of the options “on the table,” the chairman of DP World, Sultan bin Sulayem, said in a telephone interview late yesterday, declining to be more specific about a sale.
DP World, which last year acquired Peninsular & Oriental Steam Navigation Co. for $6.8 billion, plans to spend about $3.5 billion on new projects over the next five years, the chief executive officer, Mohammed Sharaf, said in a June interview. The company says it aims to double handling capacity to 84 million 20-foot containers a year by 2016 to catch up with Hutchison Port Holdings Ltd. and PSA International Pte.
DP World was forced to sell assets acquired from P&O by American lawmakers, who cited security concerns. In May, DP said it won the British government’s approval to spend $3 billion developing a deep- water port near London, and in July Mr. bin Sulayem said the company will buy or expand port facilities in China and India.
