#SaudiArabia Hospital Operator SMC Claws Back Dividends During IPO Process - Bloomberg

Saudi Arabia Hospital Operator SMC Claws Back Dividends During IPO Process - Bloomberg

Specialized Medical Co., which operates hospitals in Saudi Arabia, is set to close the institutional books for its initial public offering after existing shareholders agreed to return recently paid dividends and the company issued a revised prospectus.

The dividends, totaling 200 million riyals ($53 million), will be returned to the company by the end of June, SMC said in a second prospectus issued on May 25. The firm also announced a reset of the institutional order book, and held a call with investors two days later.

At least two investors have withdrawn their orders while at least one other still intends to buy shares, according to people familiar with the matter, who declined to be identified by name.

Institutional investors have until 5 pm Riyadh time today to revise or cancel orders. No new bids will be accepted. The retail subscription period will be June 15 and 16.

An SMC spokesperson said that, as disclosed in the second supplementary prospectus, shareholders “decided to reverse the dividends for the general benefit of the IPO.” The spokesperson added that the company remains confident about the listing and that the “institutional tranche continues to attract strong interest, in line with recent IPOs.”

A spokesperson for the Saudi Capital Market Authority, the regulator, said all its decisions related to listings are published through its official channels and referred further questions to SMC.

Dividends paid in the fourth quarter last year were disclosed in audited financial statements, the company said in its May 27 presentation to investors. Dividends paid in the first quarter this year were not disclosed “due to a technical interpretation issue.” The regulator “requested formal alignment across all documentation, prompting this procedural update,” the company said in the presentation, part of which has been seen by Bloomberg News.

Existing SMC shareholders are offering a 30% stake, or 75 million shares, at a price range of 24 to 25 riyals apiece. The top end of that range implies a market value of about 6.2 billion riyals.

The Company for Cooperative Insurance — known as Tawuniya — agreed to subscribe to 5.9 million shares, or roughly 2.35% of the company’s post-offer equity, as a cornerstone investor. SMC said Tawuniya’s allocation remains unchanged. The offering was fully covered within hours of the subscription period opening, Bloomberg News reported earlier this month.

SMC is working with SNB Capital and EFG Hermes on the IPO. Representatives for SNB declined to comment, while EFG didn’t immediately respond to requests for comment.