Dubai's Emaar Properties announced the price range on Thursday for the initial share sale of its Egyptian unit at below previously-indicated levels, giving an offer size of 2.55 billion pounds ($334 million) at the top of the range.
The flotation will involve 600 million shares, equivalent to 12.99 percent of the company, offered at a price between 3.5 pounds and 4.25 pounds. The final price will be decided on or around June 18, Emaar said in a bourse filing in Dubai.
This range was below the 4.49 pounds maximum that Emaar Misr cited on Monday, as well as the initial valuation of 4.70 pounds in May based on a recommendation from accountancy firm Grant Thornton.
Discrepancies between the different values were due to the need to satisfy international and local regulatory regimes, according to a banker on the deal, who spoke on condition of anonymity as he was not authorised to speak to the media.
The up-to-4.49 pounds valuation was announced after talks between the company and the Egyptian market regulator, to meet the requirement to give retail investors 15 days notice prior to the start of their offer period.
However, the price range released on Thursday was the official range under international regulations and came after initial talks with institutional investors ahead of the formal book-building process, he added.
In a note to clients, Cairo-based brokerage Naeem said the price-to-book and price-to-earnings ratios of Emaar Misr were a bit stretched but added the "underlying growth and land bank valuation" could be justifying factors.
Emaar Misr's price-to-book was 4.26-times and price-to-earnings was 25.9-times, according to Naeem. This makes it expensive compared with developers Talaat Mostafa Group and SODIC, but cheaper than Madinet Nasr for Housing and Heliopolis Housing, according to Thomson Reuters data.
Despite the revision, Emaar Misr's listing is expected to be the largest flotation on the Cairo exchange since 2007. The Egyptian subsidiary has property valued at LE23.4 billion.
Emaar Misr is expected to be listed on the Cairo stock exchange on or around July 2, the statement from Dubai's largest listed developer said.
Much of the offering will be allocated to institutional investors, with 15 percent earmarked for retail buyers.
The subscription period for institutions inside and outside Egypt will start on Thursday and is to run until June 16, when retail investors will begin subscribing. The retail offer will conclude on June 25.
"The level of interest shown from the investment community so far has been very encouraging," Mohamed Alabbar, chairman of Emaar and its Egyptian unit, was quoted as saying in the statement.
EFG Hermes and JP Morgan are joint global coordinators of the float, with Emirates Financial Services designated a lead manager.