Abraaj Capital, one of the Middle East’s largest private equity firms, has cashed out its stake in one of Asia’s biggest hospital operators.
It exited through the US$2 billion (Dh7.34bn) initial public offering of IHH Healthcare Berhad – the third-largest share sale this year after Facebook and Felda Global, a Malaysian palm oil producer.
IHH’s shares opened 10 per cent above its IPO price in Malaysia and Singapore yesterday before rising as much as 13.9 per cent. The stock closed 10 per cent higher at 3.09 ringgit in Malaysia.
IHH, majority owned by the Malaysian sovereign wealth fund Khazanah Nasional and the Japanese trading house Mitsui & Company, sold 2.23 billion shares, accounting for a 27 per cent stake in the company at an offer price of 2.80 ringgit each.
Abraaj was the selling shareholder, offering its 7 per cent stake consisting of 434.65 million existing shares.
The remaining shares offered to investors were new.
“The offering received strong global institutional and retail demand,” Abraaj said.
“Over 400 global institutional accounts participated with the institutional books more than 130 times covered while the Singapore and Malaysia retail offers were each more than 11 times and five times covered respectively.”
The IPO was reliant on cornerstone investors, who are given a large allocation in exchange for agreeing to hold them for a set period of time during which they cannot be sold, Abraaj said.
BlackRock Investment Management, the Kuwait Investment Authority and the Government of Singapore Investment Corporation, among other investors, all agreed to a six-month lock-up.
The $2bn IPO comes with many buyout firms struggling to exit their investments as unfavourable market conditions deter a lot of companies from selling their shares to the public.
Abraaj on Tuesday announced it had completed the acquisition of Aureos Capital, based in London, which invests in small and mid-cap companies in Asia, Africa and Latin America.
Abraaj’s value stands at $7.5bn following that transaction and its geographical footprint has expanded across more than 30 countries, managing investments in 153 companies with a team of 150 executives.
In March, Abraaj bought a stake in The Entertainer, a publisher of discount coupons in seven markets including the UAE, Saudi Arabia, Kuwait and Cyprus.
The private equity firm also has holdings in the Egyptian contractor Orascom Construction, the Sharjah budget carrier Air Arabia and the supermarket chain Spinneys.
The company was founded in 2002 by the group chief executive Arif Naqvi.
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