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Saudi flour manufacturer Fourth Milling Company (MC4) is taking a 30% stake to Tadawul’s main market in a secondary share sale, according to the company’s prospectus (pdf). The state-owned company is putting 162 mn shares up for grabs.
Subscription limits: Institutional investors will be able to subscribe to 100% of the offering, booking a maximum of around 27 mn shares and a minimum of 300k shares each. Meanwhile, retail investors may receive up to 20% of the shares on offer if there is sufficient demand. Each retail investor would be allowed to subscribe for a maximum of 250k shares, and a minimum of 10 shares.
Use of proceeds + lockup: Proceeds from the sale will go directly to the selling shareholders, after some SAR 23 mn are used to cover IPO-related expenses, according to the prospectus. They will not be able to sell down their positions for a period of 6 months starting from the first day of trading.
Post-IPO ownership structure: MC4 is currently 100% owned by Allana International, Abdullah AlOthaim Markets and United Feed Manufacturing, with each holding equal shares. Their post-IPO holding will settle at a combined 70% stake.
The timeline:
- Institutional investors will be able to place their orders starting Sunday, 15 September until Thursday, 19 September;
- The two-day retail subscription process is slated to start on Wednesday, 2 October;
- The final allocation of shares will take place on Sunday, 6 October;
- Any excess subscription fees will be refunded by Wednesday, 9 October.
By the numbers: MC4’s net income dropped 12.4% y-o-y to SAR 142.8 mn in 2023, and its revenues declined 2.2% to SAR 565.6 mn.
ADVISORS- Riyad Capital is quarterbacking the transaction as lead manager, financial advisor, book-runner and underwriter, with Baker Mckenzie providing counsel to the issuer. PwC will act as financial due diligence advisor, Euromonitor International was tapped as market study consultant, and EY is auditor. Riyad Bank and Arab National Bank are receiving agents. Meanwhile, Khoshaim & Associates will act as legal advisor to Riyad Capital.
