Investcom Holdings, a telecoms company with operations largely in the Middle East, has hired banks to prepare an initial public offering that could value the firm at up to $1.5 billion, according to a source familiar with the company. Investcom, which is partly owned by Lebanon's Mikati family, is looking to raise as much as $400 million, which would make it the region's largest IPO so far this year. It has mandated banks Citigroup and HSBC to float the firm on the Beirut Stock Exchange towards the end of this year. It is also likely to list global depository receipts in London.
A company representative in Beirut played down talk of an IPO.
"We've been thinking about it for a long time, but there's no plan yet that's very imminent," said Nian Kawas, Investcom executive director. Citigroup and HSBC declined to comment.
Lebanon has been in political upheaval recently after the assassination of former Prime Minister Rafik al-Hariri, which has caused uncertainty about the country's economy but has had limited effect on its equity market.
Investcom was founded in 1982 and has mobile businesses in Lebanon, Syria, Yemen, Ghana, Guinea, Congo, Benin and Liberia; fixed-line units in Monaco, Saudi Arabia, the UK and France; and engineering service units in Lebanon, Saudi Arabia, Morocco and Jordan, according to its Web site.
Middle Eastern telecoms firms have become increasingly active in pursuing opportunities across the region, with firms such as Egypt's Orascom Telecom and Qatar Telecommunications winning mobile phone licences outside their home market.
There also has been massive demand for Middle Eastern IPOs in recent months as the region's cash-rich investors look for opportunities and as foreign funds are given more flexibility to invest.
Ettihad Etisalat, a UAE-led consortium that won Saudi Arabia's second mobile phone licence, listed in Riyadh and then saw its share price increase by six times on its first day of trading last December. More recently, half of the population of Saudi Arabia applied for shares in the Kingdom's listing of new Islamic Bank AlBilad, the firm has said.
Outside of Saudi Arabia, which has strict rules on foreign investment in IPOs, Egyptian sanitary ware producer Lecico raised over $130 million at the end of last year.
According to data provider Dealogic, so far this year $497 million has been raised in three deals in the Middle East, against $166 million in the same period in 2004. Last year, 18 new listings raised over $1.6 billion from the region, against none the year before and ten times more than in 2002.