A Middle East telecoms company controlled by the family of the murdered former Lebanese Prime Minister Rafik Hariri abandoned plans yesterday for a $5.7bn (£3bn) flotation in London and Dubai.
The decision to scrap the initial public offering of shares in Oger Telecom came on the same day as another senior Lebanese minister was shot dead in Beirut. Pierre Gemayel, Lebanon's Christian industry minister and, like Mr Hariri, a prominent anti-Syrian politician, was gunned down in his car at point-blank range. Mr Hariri was killed in a massive bomb blast in February last year.
A spokesman for Oger maintained that the two events were entirely unconnected, saying the share offer had been cancelled because of "increasingly challenging and volatile regional market conditions". He added that the decision to pull the float had been taken in the early hours of yesterday morning, before news of Mr Gemayel's assassination.
The Dubai-based Oger is controlled by the construction giant Saudi Oger, which is in turn owned by the Hariri family. One of Mr Hariri's sons, Mohammed, is chairman of the company.
The float was due to have been priced yesterday morning with unconditional dealings commencing in London and Dubai on Friday. At the mid-point of the price range, the offer would have raised $1.25bn. All but $150m of the proceeds would have gone back to the selling shareholders, who also include Telecom Italia and a group of Middle East and international banks.
Had the float gone ahead, it would have doubled the size of the fledgling Dubai International Financial Exchange overnight. There are currently just seven companies listed on the exchange, with a combined market capitalisation of $6bn.
Advisers to the float said that Middle Eastern stock markets had been highly volatile this year and had become more so during the marketing of the Oger offer. The Dubai exchange has lost 11 per cent of its value since the start of this month and a quarter of its value since the beginning of September. The main indices in Saudi Arabia, Qatar and Abu Dhabi are also near to two-year lows.
Analysts said that cancelling the float would also have helped protect a number of investors with business ties to the parent company.
Oger owns Turkey's biggest fixed-line telephone company and has a mobile network in the country in addition to a mobile network in South Africa and internet operations in Saudi Arabia, Lebanon and Jordan.
The company's chief executive, Paul Doany, said he still hoped to bring Oger to market some time in 2007.Reuse content