Al Habtoor Group Postpones $1.6bn IPO

Al Habtoor Group, the Dubai family-owned conglomerate, has postponed its plans for an initial public offering, it announced on Tuesday.

No reasons were given for the withdrawal of the IPO, which was expected to raise around $1.6 billion when it listed on the Nasdaq Dubai next year.

Khalaf Al Habtoor, chairman of the group which is known for its involvement in the construction, hotel, automotive and publishing sectors, said in a statement: “After a thorough evaluation I have decided to postpone the IPO.

“It is a moral issue not taking the group public at this time. I will continue to focus on best practice and growing the company in a sustainable way.

“The large scale investments underway right now are within the Al Habtoor Group’s expertise. They offer something promising to the Group and the UAE,” he added.

Al Habtoor pointed out that the economies of the GCC are projected to grow robustly, and this is where the focus of the group will be for the time being.

The group’s chairman added that the IPO funds would be an added responsibility to him personally, while the group ascertains where the best investment opportunities are.

A senior banking source speaking to Reuters said: “There was a sharp discrepancy between what the group was expecting (in terms of price) and the reality of the underlying market here,” adding that several international banks had pitched for the IPO mandate.

“It is a wise move to back off if you are not really sure whether it can be pulled off. The equity markets are lacklustre globally and out in the region, there has been a major slump since the crisis,” the source said, declining to be identified because of the sensitivity of the matter.

Al Habtoor revealed that the Group received an independent valuation from global advisory firm Grant Thornton which valued the company at Dhs22.14 billion ($6.06 billion).

The group has been on a steady growth trajectory since its inception, consistently posting annual profit.

Al Habtoor said the Group’s full year earnings are forecasted to grow 16 per cent in excess of Dhs700 million ($191.8 million). That compares to Dhs604 million ($165.5 million) in 2011. It marks the first time the Group has publically announced its earnings.

In the past 12 months, the Al Habtoor Group has announced investments worth Dhs5.9 billion in the hospitality sector, including a Dubai project comprising of three hotels in one complex as well as a Las Vegas-style theatre.

It will include the first super luxury St. Regis hotel in Dubai, a W hotel and a Westin hotel. The group is also developing the Waldorf Astoria on Dubai’s Palm Jumeirah.