Dubai-based asset manager, Al-Masah Capital Management, is said to be advised by Deutsche Bank and Credit Suisse on an Initial Public Offering (IPO) of its healthcare unit, Avivo.
The company plans to raise $200m before the IPO from strategic investors and has already submitted documentation to London Stock Exchange, according to a person familiar with the matter. Al-Masah aims to float the share sale in London in the fourth quarter of this year or early in 2017, the person said asking not to be identified as the information is private.
Avivo is valued between $800m and $1bn, however, the Al-Masah hasnt decided on the percentage of share it will sell to the public, the person added.
Spokespersons from Credit Suisse and Al-Masah and a Deutsche Bank spokesman declined to comment.
Formerly known as Healthcare MENA, Avivo operates two hospitals, 14 specialty centres, eight dental centres, six pharmacies and two diagnostic facilities in the UAE and Kuwait.
Al Masahs move follows healthcare groups NMC Health and Al Noor Hospitals Groups listing on London Stock exchange. KBBO Group, an Abu Dhabi-based investment holding firm, also plans to list 40 per cent of its unit Centurion Partners in London. Goldman Sachs and Morgan Stanley are advising the company on a $1bn-plus transaction planned for first half of this year.
Healthcare as a sector is more appreciated in London, Shailesh Dash, CEO of Al-Masah told MEED in November 2015. The companies which are listed in London from here carry the right valuation, and they understand the business more.
The UAE-based companies are increasingly looking to list in London to raise capital due to a lack of liquidity and depressed valuations on the countrys two main stock exchanges Dubai Financial Market and Abu Dhabi Securities Exchange. Dubai bourse has slumped from a mid-2014 peak of near 5,500 level to current 3,380 level on 7 March as a steady decline in the price of oil has weighed heavy on investor sentiment. Brent crude, the benchmark for more than half of the worlds oil, over the same period has lost more than 60 per cent of its value.
DFM General Index, the main gauge for Dubai bourse has climbed 7.6 per cent this year while benchmark index for Abu Dhabis exchange has added 6 per cent as crude recovered from a 12-year low of below $30 per barrel in January to current $40 per barrel level.
A number of UAE companies have already shelved listing plans, due to market volatility. Dubais Daman Investments announced plans to list on the Dubai stock exchange, selling shares equivalent to a 55 per cent stake in the company but theres no visibility as to when the firm will go ahead with the share sale. Al Shafar General Contracting, a Dubai-based construction firm has also delayed its IPO, according to an investment banking source.
A lack of investor appetite in February 2015 forced Abu Dhabi-based vehicle rental company Masser Solutions to postpone its IPO, while utilities company Empower last month said it is pulling back share float due to adverse market conditions.