Abu Dhabi’s ADIA to Sell Half Its Stake in Qatar’s Ooredoo
TL;DR
Abu Dhabi Investment Authority is selling half its stake in Ooredoo, a 5% share sale worth up to $572 million. The sale aims to boost Ooredoo's free-float and is part of ADIA's portfolio management. Ooredoo's stock has risen this year despite the sale plans.
Tags
Abu Dhabi Investment Authority is looking to sell a 5% stake in Qatari telecommunications company Ooredoo QPSC in a secondary share sale that could raise as much as $572 million.
The wealth fund is selling about 161 million shares, or half its stake, according to terms of the deal seen by Bloomberg News. It’s offering the stock at 12.40 riyals to 13 riyals apiece, a discount of between 11% to 6.7% from Monday’s close.
Books were covered within minutes of opening on Tuesday, the terms showed.
The stock has risen by about a fifth this year, despite having pared some gains after Bloomberg News reported ADIA’s plans to sell part of its stake last week.
The Qatari firm’s Chief Executive Officer Aziz Aluthman Fakhroo said talks with ADIA stemmed from the fund’s broader portfolio management and Ooredoo’s efforts to boost share liquidity following a year-long discussion with its strategic shareholders.
The deal, which is Qatar’s first-ever fully-marketed offering, will boost Ooredoo’s free-float from 22% to at least 27%, Fakhroo told Bloomberg News in an interview. The firm hopes to raise that further to 30% “very soon,” he added.
“This will also drive future demand by the re-weighting within different indexes, including the MSCI index, of which we’re currently a part,” he said.
The firm’s largest investors include the Qatar Investment Authority, which owns roughly 53%, and the General Retirement and Social Insurance Authority, which holds about 12.7%, according to data compiled by Bloomberg. Another state insurance authority holds nearly 2%, according to the prospectus.
ADIA, which has been a shareholder in Ooredoo since it listed in 1998, will hold a 4.99% stake post the deal.
Ooredoo, which currently trades in both Abu Dhabi and Doha, plans to phase out the UAE listing, Fakhroo said. It lifted its dividend guidance last month, pointing to a solid balance sheet after reporting a 6% increase in normalized net income to $843 million for the first nine months of the year.
ADIA manages more than $1 trillion in assets and is the region’s largest sovereign wealth fund. It is one of Abu Dhabi’s three state-backed investors that together oversee close to $1.7 trillion.
Citigroup Inc., HSBC Holdings Plc and QNB Capital are arranging the deal, according to terms seen by Bloomberg News. The bookbuild will run from Nov. 18 to Nov 19.