AS&H Law Firm in co-operation with Clifford Chance advises Savola Group on Saudi Arabia's first accelerated book-built block trade
Savola Group sells 2% of Almarai through the first accelerated book-built block trade on the Saudi Stock Exchange.
Abuhimed AlSheikh AlHagbani (AS&H) Law Firm in Saudi Arabia in co-operation with Clifford Chance, advised Savola Group, a Saudi publicly listed joint stock company, on the successful completion of an accelerated book-built block trade to international, regional and local investors for 16 million shares in Almarai Company (representing 2% of the issued share capital of Almarai Company). HSBC Saudi Arabia acted as sole bookrunner and broker on the transaction.
Savola Group is one of the Kingdom's largest food production companies and Almarai is the biggest dairy firm in the Arabian Gulf. They are both listed on the Saudi Stock Exchange (Tadawul).
The transaction, which was initiated after market close on Tuesday 12 September 2017, is the first-of-its-kind on the Saudi Stock Exchange. With a post-transaction holding of 34.52%, Savola will continue to be the largest shareholder in Almarai Company.
AS&H Law Firm Partner and Head of the AS&H Capital Markets Practice, Mansoor Al-Hagbani, who co-led the team with Clifford Chance Partner, Omar Rashid, added: "Once again we have confirmed to the Saudi and international markets our leading edge expertise through our work on this first-of-its-kind accelerated book-built block trade. Congratulations to our client, Savola Group, the other advisers, and to our combined talented team of AS&H and Clifford Chance lawyers."
Rayan Fayez, Savola Group CEO said: “We are proud to pioneer the overnight accelerated block trade in the Kingdom and we believe that this transaction solidifies Tadawul’s position as a leading and world class regional exchange. We were delighted with the support we received from our team of advisors for this first-of-its-kind transaction.”
The trade promotes the Kingdom’s objective of increasing international participation in the Saudi financial markets with the majority of the orders received for this transaction coming from international and regional investors.
Huda Al Lawati, Chief Investment Officer for the Savola Group noted: “This sale is in line with the Group’s active capital reallocation and strategic investment mandate and, on completion, will generate total proceeds of SAR1.12 billion and a profit of SAR694 million for the Group. We were delighted to work with AS&H Law Firm in co-operation with Clifford Chance on this transaction given their Saudi law expertise and knowledge of market practice on such trades in international capital markets”. Savola intends to use the proceeds of the sale SAR1.12 billion for general corporate purposes.
Clifford Chance Partner, Omar Rashid, who is seconded to AS&H in Riyadh and co-led the team on this transaction remarked: "We are delighted to have supported Savola Group on an historic transaction of this kind. Accelerated book-built block trades are relatively common in international capital markets, so we are delighted to have worked on what we hope will also provide the blue print and benchmark for future block trades on the Saudi Stock Exchange. This deal also represents another step in promoting international investment in the capital markets in the Kingdom in accordance with Vision 2030."
The team was co-led led by Mansoor Al-Hagbani (AS&H Partner and Head of Capital Markets, Riyadh) and Omar Rashid (Clifford Chance Partner seconded to AS&H and co-Head of Corporate, Riyadh) and supported by Basel Al-Hadidi (Clifford Chance Associate seconded to AS&H, Riyadh). John Connolly (US Capital Markets Partner, Clifford Chance London), Arthur Levi (Counsel, Clifford Chance London) and Tony Lally (Senior Associate, Clifford Chance London) also advised on the US and UK securities law aspects of the transaction.
AS&H in co-operation with Clifford Chance regularly advises Saudi and international clients on their strategic transactions in the Kingdom of Saudi Arabia. It has also recently advised Al-Borg Medical Laboratories on the strategic minority equity investment by Investcorp and Cosumar on its first equity investment in the Kingdom in a greenfield sugar refinery project in Yanbu.