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Announcement of Offer Price Range and Opening of Subscription Period

2 Nov 2023

Investcorp Capital plc (the “Company” or “Investcorp Capital”), a provider of capital and capital financing services in the alternative investments space, announces the Offer Price Range and opening of the subscription period for its Initial Public Offering (“IPO” or the “Offering”) on the Abu Dhabi Securities Exchange (“ADX”).

  • The Company intends to offer 643,000,000 ordinary shares with a nominal value of USD 0.50 (equivalent to AED 1.84) each (the “Shares”), representing 29.34% of the Company’s issued share capital post the issuance of the New Shares (as defined below), in an initial public offering and to list its shares on the ADX.
  • The price range has been set between AED 1.90 to AED 2.30 per Share valuing the Company at between AED 4,163.9 million to AED 5,040.5 million (equivalent to USD 1,133.8 million to USD 1,372.5 million) and an implied dividend yield of 9.9% – 8.4% for the financial year ending 30 June 2024
  • IVC Strategic Investment Company has committed to being a cornerstone investor in the IPO with a commitment of approximately USD 250 million.
  • The subscription period for the Offering starts today, 2 November 2023, and runs until 8 November 2023 for Professional Investors subscribing in the First Tranche, and until 9 November 2023 for Professional Investors subscribing in the Second Tranche (each as defined below).
  • The final offer price (the “Final Offer Price”) is expected to be announced on 10 November 2023, while Admission (as defined below) is expected to occur on 17 November 2023.

DETAILS OF THE OFFER PRICE RANGE

The price range for the Offering has been set between AED 1.90 to AED 2.30 per Share, implying an equity value for the Company of AED 4,163.9 million to AED 5,040.5 million (equivalent to USD 1,133.8 million to USD 1,372.5 million) and an implied target dividend yield of 9.9% – 8.4% for the financial year ending 30 June 2024. Based on this price range, the Company expects the gross proceeds from the sale of New Shares to be between AED 610.9 million (USD 166.3 million) and AED 739.5 million (USD 201.3 million), and therefore intends to pay a dividend of between AED 411.7 million (USD 112.1 million) and AED 422.0 million (USD 114.9 million) for the financial year 2024, equivalent to 8% of the Net Asset Exposure of AED 4,536 million (USD 1,235 million) as at 1 July 2023 increased by the primary proceeds raised in the Offering.

The Company will issue and sell 321,500,000 new Shares (the “New Shares”) and Investcorp S.A. (the “Selling Shareholder”) will sell 321,500,000 existing Shares (the “Sale Shares” and together with the New Shares, the “Offer Shares”) in the IPO. The Company and the Selling Shareholder reserve the right to amend the size of the Offering and the size of any Tranche (as defined below) at any time prior to the end of the subscription period at their sole discretion, subject to the applicable laws of the UAE and the approval of the Securities and Commodities Authority in the UAE (“SCA”).

Assuming all the Offer Shares are sold, the size of the Offering will be AED 1,221.7 million to AED 1,478.9 million (equivalent to USD 332.7 million to USD 402.7 million). The Final Offer Price is expected to be announced on 10 November 2023.

Details of the Offering are available in the Arabic language UAE prospectus, approved by the SCA, dated 24 October 2023 (the “UAE Prospectus”), the English language UAE prospectus, dated 24 October 2023,  and the English language International Offering Memorandum, dated 2 November 2023. The UAE Prospectus and the International Offering Memorandum are available at https://www.investcorp-capital.com/.

SUBSCRIPTION PROCESS

As formally announced on 24 October 2023, the Offering details are as follows:

  • an offering of 5% of the Offer Shares, allocated on a pro rata basis and open to “Professional Investors” (as defined in the SCA Board of Directors’ Chairman Decision No.13/R.M of 2021 (as amended from time to time) (“Professional Investors”)) (“First Tranche”); and
  • an offering of 95% of the Offer Shares, allocated on a discretionary basis and open to Professional Investors (“Second Tranche”).

The opening of the subscription period for the IPO starts today, 2 November 2023, and will continue until 8 November 2023 for Professional Investors subscribing to the First Tranche; and until 9 November 2023 for Professional Investors subscribing to the Second Tranche.

Allotment notifications, via SMS, for Professional Investors belonging to the First Tranche will be sent on 14 November 2023. Refund of surplus investments will commence on 14 November 2023.

Admission of the Shares to trading on ADX (the “Admission”) is expected to be on 17 November 2023, subject to receiving all required regulatory approvals.

Moelis & Company UK LLP, DIFC Branch has been appointed as the Independent Financial Advisor to the Selling Shareholder.

Emirates NBD Capital PSC, First Abu Dhabi Bank PJSC, and HSBC Bank Middle East Limited have each been appointed as Joint Global Coordinators and Joint Bookrunners. Emirates NBD Bank PJSC and First Abu Dhabi Bank PJSC have been appointed as the Joint Lead Receiving Banks. Al Maryah Community Bank and Mashreqbank PSC have been appointed as the Receiving Banks.

CORNERSTONE INVESTORS

On 24 October 2023, it was announced that Investcorp Capital and the Selling Shareholder entered into a cornerstone investor agreement with IVC Strategic Investment Company (the “Cornerstone Investor”) pursuant to which the Cornerstone Investor has committed to acquire Offer Shares in the Global Offering at the Offer Price. In aggregate, the Cornerstone Investor has committed approximately USD 250 million to the IPO.

IVC Strategic Investment Company is a special purpose vehicle that was established to act as an aggregator of orders from certain wealth management investors and a prominent Abu Dhabi-based investor.

PRICE STABILIZATION MECHANISM

In connection with the Offering, the Company and the Selling Shareholder will appoint a stabilising manager (the “Stabilizing Manager”), who may, to the extent permitted by applicable law and regulation, including the ADX Operational Rules Booklet issued by the ADX Board Members Decision No. (4/2/2022) on 3 March 2022 (the “ADX Rules”), effect stabilizing transactions with a view to supporting the market price of the Shares, in each case at a higher level than that which might otherwise prevail in the open market. The Stabilizing Manager will be appointed for  a period not exceeding 30 days from Admission (the “Stabilization Period”). All stabilizing transactions will be undertaken in compliance with applicable law and regulation, including the ADX Rules. In accordance with Article 3, Chapter 15 of the ADX Rules, the Stabilizing Manager will disclose to the market the extent of any stabilizing transactions conducted during the Stabilization Period in relation to the Offering. 

As part of the Offering, the Selling Shareholder will sell 83,869,565 Offer Shares (the “Stabilization Shares”) and such shares will be allocated to investors as part of the normal allocation process for the Offering. The Stabilizing Manager will use the proceeds of the sale of the Stabilization Shares to buy up to the same number of Shares that underlie the Stabilization Shares at or below the Final Offer Price during the Stabilization Period. In the event the Stabilizing Manager does not purchase any Shares, the Stabilization Shares will remain fully allocated. At the end of the Stabilization Period, the Stabilizing Manager will return to the Selling Shareholder any Shares which have been purchased in the market as a result of stabilizing transactions and/or any remaining portion of the proceeds which were not used for stabilizing transactions, as well as any interest that has accumulated on the amounts corresponding to such proceeds. Any Stabilization Shares made available will rank pari passu in all respects with the Shares, including for all dividends and other distributions declared, made or paid on the Shares, will be purchased on the same terms and conditions as the Shares being issued or sold in the Offering and will form a single class for all purposes with the other Shares.

None of the Joint Lead Managers, the Joint Bookrunners, the Advisors (each as defined in the UAE Prospectus) or their respective directors, officers, employees or agents will have any direct or indirect involvement in, or responsibility or liability for, nor derive any direct or indirect benefit from, the stabilizing transactions envisaged hereby and stabilization will be carried out exclusively by the Stabilizing Manager.