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We now have two milling companies planning to IPO in the same window: The Fourth Milling Company (MC4) has been cleared by the Capital Market Authority (CMA) to offer a 30% stake (or abut 162 mn shares) on Tadawul, the market regulator said in a statement. The CMA provided no further details other than its standard note that the company’s prospectus would be published “within sufficient time prior to the start of the subscription period.”
MC4 joins Arabian Mills Food Products in exploring a sale. Arabian Mills said earlier this week it plans to offer a 30% stake on Tadawul.
We first heard of this IPO last year: Sources had told Bloomberg last year that MC4 was gearing up for an IPO in 2024, with the company later tapping Riyad Capital as financial advisor for the transaction back in January.
About the company: MC4 produces flour, feed, bran and wheat derivatives through its factories in Riyadh, Madinah and the Eastern Region, according to its website. It has a daily milling capacity of 3.1k tons of wheat grains and daily production of 450 tons of animal feed.
BACKGROUND: MC4 is among several state-owned milling firms that were sold to the private sector in recent years. MC4 was acquired in 2021 by a consortium that includes Abdullah Al Othaim Markets, Allana International Company, and United Feed Manufacturing Company for SAR 859 mn (c. USD 229 mn).
The drive to “monetize”: Modern Mills Company (MMC), previously known as Second Milling Company, made its debut on the main market in March when it sold a 30% stake in an IPO that saw strong demand from retail investors, valuing the company at a SAR 3.9 bn. Our friends at First Milling led the way last year when they went public with a USD 266 mn IPO.
LISTINGS SET TO PICK UP PACE-
Other transactions in the pipeline:
- Hotels and resorts operator Boudl has filed to go public;
- Electronics retailer Extra plans to IPO the unit that owns and operates Tasheel, its consumer finance arm, with many in the market expecting the transaction will now come in fall;
- Perfume maker Arabian Oud is said to have appointed bankers ahead of a share sale;
- PIF-backed lender Riyad Bank is considering the listing of its investment banking arm Riyad Capital ;
- Nupco — a unit of the PIF — has reportedly tapped Rothschild & Co as financial advisor for its potential Tadawul IPO;
- Singapore’s Olam Group is mulling the IPO of its Olam Agri subsidiary on Tadawul;
- Budget airline Flynas is reportedly looking to go public this year.
- Aster DM Healthcare looks set to spin off its GCC assets and seek a dual listing on Tadawul and in the UAE;
- Hypermarket operator Lulu is said to be eyeing a dual listing on Tadawul and ADX.
IN CONTEXT- The local exchange welcomed 13 new listings in 1Q 2024, including: three IPOs on the main market and six Nomu IPOs. They collectively raised SAR 7.3 bn (c. USD 1 bn) in IPO proceeds in 1Q 2024 after raising SAR 13 bn in 2023 to account for 70% of GCC IPOs.
IN OTHER IPO NEWS- Another Nomu listing is in the works: The Gulf Applications Company (Gapp) is planning to offer a 20% stake (c. 6.2 mn shares) on Nomu, Tadawul’s parallel market, according to a statement from the CMA. The prospectus will be published within sufficient time prior to the start of offering, the market regulator said.
About the company: Established in 2007, Gapp is a value-added IT distributor of advanced technology products, ICT, cloud, network energy, servers, wireless mobility and power generators among others, according to its website.
