The Bank of London & The Middle East Plc, the largest Islamic bank in Europe, plans to list on the Nasdaq Dubai stock exchange in October, becoming the first company to join the bourse in more than four years.
The bank expects to price the shares at $2.57 apiece, giving it an implied market value of about $503 million, Chief Financial Officer Richard Williams told reporters in Dubai today. Existing shareholders, most of which are based in Kuwait, will swap their shares for those in a new listed entity, BLME Holdings, with no new capital being raised, he said.
The plans come as Dubai’s economy recovers, its stocks rebound from the global credit crisis and after the sheikhdom said in January it wants to make Islamic finance a “core industry.” The global Shariah-compliant market may reach $2.6 trillion by 2017 from $1.2 trillion, according to a report from Pricewaterhouse Coopers published in July. BLME established a representative office in the emirate in June.
“With the announcement earlier this year that Dubai is positioning itself as a center for Islamic finance, it makes sense for us to get better known in this market,” Chief Executive Officer Humphrey Percy said at the press conference today. The bank considered several stock exchanges, including the Alternative Investment Market in its London base, but Dubai offered “the right market at the right time,” he said.
The last company to list on either of the emirates’ two stock exchanges was Drake & Scull International in March 2009. The DFM General Index has climbed 63 percent this year, more than any of the 50 largest equity markets, according to data compiled by Bloomberg.
BLME committed to list shares when it was established in 2006, and shareholders now wish to see their investments valued on the open market, Percy said.
The bank has more than 260 shareholders. Kuwait-listed Boubyan Bank KSC is the largest with a stake of about 22 percent and the only shareholder owning more than 10 percent. The bank expects between 5 percent and 15 percent of the stock to trade after the listing, based on shareholder feedback, the CEO said.
BLME is “well capitalized” until 2016, with almost 250 million pounds ($398 million) at its disposal, he said.
“If at that time we decide we want to increase our capital, we think we’ll be well positioned having listed on Nasdaq Dubai,” Percy said.