Minority stake to float on dubai, london bourses

Nov. 08, 2006- Oger Telecom, a subsidiary of the Saudi Oger company owned by the Hariri family, announced Wednesday that it plans to float a minority stake on the London and Dubai stock exchanges by the end of this year.  Worth an estimated $1.25 billion, the international public offering (IPO) would far exceed any of the international floats on the London Stock Exchange in the past two years.

Oger, which owns a controlling stake in Turkey's main telecom provider and operates one of Lebanon's five Internet Service Providers, is expected to have a market capitalization of almost $6 billion after the dual listing. The firm is set to be the first large-cap company from the Middle East and North Africa on the London Stock Exchange, and possibly the only regional company to qualify for membership in the benchmark FTSE 100 index.

Proceeds from the offering could allow Oger to step up its acquisition drive for telecom assets in emerging economies - an initiative that began with its failed bid in 2004 for the second mobile operating license in Saudi Arabia.

Last year Oger won the contract to operate South Africa's third mobile network and acquired a 55 percent stake in state-owned Turk Telecom for $6.5 billion after an intense bidding war with one of its regional competitors, UAE-based Etislat Company.

Representatives of Buchanan Communications, the public relations firm managing the float, said the portion of shares to be listed on each stock exchange will not be decided until a promotional roadshow that kicked off Wednesday is well under way. Buchanan representatives also declined to specify which countries they were eyeing for possible expansion, but said they expect to continue to consider "acquisition and investment opportunities" in "markets similar to those in which we operate."

"Convergence is an extremely hot topic and our portfolio of assets gives us tremendous exposure to fixed-line, mobile and broadband products and services," a Buchanan representative told The Daily Star in an email. "Broadband in particular is an exciting opportunity for Oger Telecom, especially in Turkey where we have a strong presence."

Though Oger is expected to continue its strategy of acquiring mobile, fixed-line and Internet assets in newly privatized telecom markets, the company says it is not interested in a mobile operating license in Lebanon.

At the request of the Hariri family, Oger agreed not to bid on a Lebanese mobile license - if and when the privatization of the telecom sector is complete - a source close to the offering told The Daily Star on condition of anonymity.

The source did not know whether the agreement extended to all of Saudi Oger's holdings.    

The Hariri family currently owns 60 percent of Oger Telecom via its Saudi Oger conglomerate. Other investors include Arab Bank, in which Saudi Oger has an 11 percent stake; the Bank of Sharjah; and Telecom Italia. Saudi Oger plans to retain a 40 percent controlling stake in Oger, according to Wednesday's statement.

The price range for the IPO is $1.15 to $1.42 per share listed on the Dubai International Financial Exchange and $11.50 to $14.20 for Global Depository Receipts listed on the London exchange, with each GDR representing 10 shares.

International financial consultant ABN AMRO and Citigroup are joint global coordinators and joint book-runners for the offering.