Alef Education shares slump in first day of trading on ADX

Abu Dhabi edtech platform Alef Education struggled on its first day of trading on the ADX, in a rare down day for an IPO on a Gulf exchange.

The shares closed 13% lower than the offer price of 1.35 dirhams on Wednesday despite strong demand for the stock when the IPO was rolled out. Investors poured in over $20 billion worth of orders, pricing Alef at the top of the range and raising 1.89 billion dirhams ($515 million) for the company.

But Abu Dhabi’s first initial share sale of 2024 marks the worst debut since 2021. The 14 companies that had gone public since the start of 2021 saw their shares rise by about 31% on average in the first session, according to Bloomberg data.

“Opening up below IPO price reflects negatively on the valuation it was sold at and the risk appetite of investors and liquidity of the market at that point,” Mohammed Ali Yasin, founder and chief executive officer of Oracle Financial Consultancy and Investments, told the news agency.

Alef Education raises $515 million in oversubscribed IPO

Alef Education delivered a promising IPO, the first of the year for Abu Dhabi’s ADX, pricing the education technology platform at the top of the range and drawing $20 billion in orders.

The offering was 39 times oversubscribed and raised a total AED 1.89 billion ($515 million) after the deal priced shares at 1.35 dirhams each, implying a market capitalization of $2.6 billion.

Alef, founded in 2016 and indirectly owned by private asset manager Abu Dhabi Capital Group, makes online learning programs for K through 12 students, with customers in the UAE, Morocco, Indonesia and the U.S. Shares are expected to be listed on June 12 under the ticker symbol “AlefEdT.”

The Daily Circuit: Aramco prices shares + Sheikh Tahnoon visits Microsoft HQ

👋 Hello from the Middle East!

Today in The Daily Circuit, we’re looking at UAE power player Sheikh Tahnoon’s pilgrimage to Microsoft HQ, Alef Education’s oversubscribed IPO, Mubadala’s acquisition of the Starbucks franchise in Brazil and a third cohort of graduates from the Abu Dhabi university dedicated to AI. But first, pricing slumps in Aramco’s offering.

While Saudi Arabia’s impending sale of a second chunk of shares in Aramco looks like it will be among the world’s biggest stock offerings in years, the deal is falling slightly shy of expectations.

After almost a week of marketing the sale in London, New York and other financial capitals, the kingdom’s bankers told investors they plan to price shares of the world’s biggest oil company at 27.25 Saudi riyals ($7.27) each, the Wall Street Journal reports. That compares to the target range of 26.70 to 29 riyals and means the offering should yield $11.2 billion rather than the $12 billion previously mooted.

The reduced bounty could mean more budget tightening for some of the country’s mega-projects, such as Neom, that the offering is meant to finance, especially as oil prices slide below $80 a barrel. Sustaining the ambitious pace of construction envisioned by Saudi Crown Prince Mohammed bin Salman would require crude oil prices closer to $100 a barrel, according to calculations by the International Monetary Fund cited by Bloomberg.

Among the stock offering’s attractions for investors are the steady and increasing dividend payouts Aramco offers relative to its global oil competitors. The company carries a dividend yield of close to 7%, higher than the 3.4% at Exxon and 4.2% at Chevron, the Journal notes.

📰 Developing Stories

ROAD WARRIOR

UAE National Security Advisor Sheikh Tahnoon bin Zayed, who also chairs Abu Dhabi artificial intelligence firm G42, headed for Microsoft’s headquarters in Redmond, Wash., following a three-day state visit to Washington, D.C. He met with CEO Satya Nadella on Thursday to discuss “ways to strengthen collaboration,” according to a post on X. Microsoft, the biggest backer and partner of generative AI market leader OpenAI, made a $1.5 billion investment in G42 in April. The deal brought Abu Dhabi’s AI champion into the fold of American companies leading tech’s big wave. The investment required G42 to sever its ties with Chinese manufacturers like Huawei. Sheikh Tahnoon, who also chairs two Abu Dhabi sovereign wealth funds – Abu Dhabi Investment Authority and ADQ – is now working on behalf of the UAE to finalize a data protection and intellectual property agreement with the U.S. The aim is to assuage fears over national security as the trade relationship increasingly funnels investments to machine learning, semiconductors and aerospace. 

BOOK SMART

Alef Education delivered a promising IPO, the first of the year for Abu Dhabi’s ADX, pricing the education technology platform at the top of the range and drawing $20 billion in orders. The offering was 39 times oversubscribed and raised a total AED 1.89 billion ($515 million) after the deal priced shares at 1.35 dirhams each, implying a market capitalization of $2.6 billion. Alef, founded in 2016 and indirectly owned by private asset manager Abu Dhabi Capital Group, makes online learning programs for K through 12 students, with customers in the UAE, Morocco, Indonesia and the U.S. Shares are expected to be listed on June 12 under the ticker symbol “AlefEdT.”

💲 Sovereign Circuit

Mubadala: Brazilian restaurant chain operator Zamp, which is backed by Mubadala, has agreed to buy the rights to operate the Starbucks brand and some stores in the South American country from bankrupt SouthRock for $23 million, Bloomberg reports. The Abu Dhabi sovereign wealth fund’s Mubadala Energy unit collaborated with Indonesia’s Kotabaru Environment Agency to plant 10,000 mangrove seedlings in the area of Tanjung Pangga Village to help protect the coastal ecosystem and preserve biodiversity.

Qatar Investment Authority: The sovereign wealth fund is eyeing expansion in Japan, according to Head of the QIA advisory, Asia Pacific Abdulla Ali Al Kuwari. The QIA’s investments in Japan have more than doubled since opening an office in Singapore in 2021. So far, QIA has invested nearly $646 million in Japan, including a 5% stake in semiconductor manufacturer Kokusai Electric, valued at $320.6 million. Semiconductors, manufacturing and real estate are among the top investment priorities.

Public Investment Fund: The fate of a deal between PIF-owned LIV Golf and the PGA Tour is examined by The Athletic, one year after the two sides agreed to work together. Under the proposed agreement, the Saudi sovereign wealth fund would pour billions into the American tour and PIF governor Yasir Al-Rumayyan would be chairman of a newly formed entity with a seat on the policy board. PGA Tour Commissioner Jay Monahan would be CEO of the venture and have control over LIV’s future – a point of contention for the kingdom, which is pushing a more globalized vision for the game of golf. 

↪↩ Closing Circuit

⛽ Pipeline Building: A unit of China’s Sinopec signed a $1.1 billion deal to build natural gas pipelines for Saudi Aramco and the third phase of its Master Gas System in Saudi Arabia.

💻 Trend Capitalizing: Dubai and London fintech start-up Elevate has secured $5 million in new funding to scale its operations and capitalize on growing numbers of remote workers and freelancers.

☁️ Cloud Guardian: U.S. cloud security company Tenable signed an agreement to acquire Israeli cyber startup Eureka for an undisclosed price.

🗣 Circuit Chatter

✈️ Body Shopping: Saudia is in talks with Airbus and Boeing over orders for wide-body jets as the planemakers face constraints in producing narrow-body aircraft, Reuters reports.

🪪 Single Ticket: The Abu Dhabi Department of Economic Development launched its new Unified Economic Licence, which is designed to streamline registration and other required procedures for companies that operate in the emirate and its free zones.

🛩️ Top in Transport: The UAE ranked No. 1 in quality of air transport infrastructure, according to the World Economic Forum’s recently launched Travel & Tourism Development Index 2024.

💰Clan Wealth: Ultra-rich families worth more than $150 billion are helping to drive a resurgence in private equity buyouts and fueling some of the year’s biggest acquisitions, Bloomberg reports.

💡 Startup Support: The legacy Dubai Expo site is now home to a non-government foundation to support female tech entrepreneurs from the region and the Global South and assist start-ups that aim to tackle social and environmental challenges through grantmaking and in-kind support. The Expo City Dubai Foundation was launched at an event in the Women’s Pavilion at Expo City Dubai on Thursday. 

🌍 Power Circuit

Sheikh Khaled bin Mohamed, Crown Prince of Abu Dhabi, attended the commencement of the Mohamed Bin Zayed University of Artificial Intelligence’s third graduating class on Thursday. He was joined onstage by Dr. Sultan Al Jaber, UAE Minister of Industry and Advanced Technology and Chairman of MBZUAI, and Dr. Eric Xing, MBZUAI President, as the 101 graduates accepted their diplomas. “You don’t just have a front-row seat to history, you will play a primary role in shaping it,” Al Jaber said in a speech.

Saudi Oil Minister Prince Abdulaziz bin Salman said the kingdom will increase its oil production capacity from 2025 to 2027, before going back to the current level of 12.3 million barrels per day in 2028, speaking at the International Economic Forum in St. Petersburg. “To increase the capacity over the years, you need to have a clear path on how you produce these volumes,” he said.

➿ On the Circuit

OPEC Secretary General Haitham Al Ghais defended recent adjustments to the deal agreed upon this week limiting OPEC+ oil production output, calling it a success. Speaking at the St. Petersburg forum, Al Ghais expressed optimism about continued strong oil demand, citing a rebound in travel, Reuters reports.

Qatari Minister of Transport Jassim Al Sulaiti traveled to Zhengzhou, China, to meet Tang Yuxiang, Chairman of Yutong Bus Co., which has one of the world’s largest e-bus factories.

🎶 Culture Circuit

🎨 Under the Hammer: Highlights from the art collection of the late Dr. Mohammed Said Farsi, the former mayor of Jeddah who died in 2019, are set to dominate the Summer Fine Art auction by Sloan Street Auctions in London on June 12, Arab News reports. Among the works in the eclectic and far-reaching collection are a lithograph from David Hockney’s “Swimming Pool” series and works by pioneering artists from the Middle East, including Mohamed Nagy, Abdul Hazi El-Gazzar and Seif Wanly.

📷 Photo of the Day

🗓️ Circuit Calendar

June 11-13, Rio de Janeiro, Brazil: Future Investment Initiative Priority Summit. Saudi Public Investment Fund holds FII conference for first time in Latin America. Copacabana Palace.

June 16-18, Across MENA: Eid Al Adha. Government offices and businesses are closed throughout the region for the Islamic holiday. Dates are subject to sighting of the moon by state religious committees in each country.

June 22-23, New York City: Mubadala New York Sail Grand Prix. Flying catamarans compete at SailGP’s two-day racing festival in New York Harbor. Governors Island.

June 23-26, National Harbor, Maryland: SelectUSA Investment Summit. The highest profile event in the U.S. to facilitate business investment by connecting thousands of investors, companies, economic development organizations and industry experts to make deals. Gaylord National Resort and Convention Center.

July 15-26, Granada, Spain: ADIA Lab International Summer School. A course of lectures and case studies to explore the critical role of trust and safety in AI, examining the ethical, technical and societal implications of AI applications. University of Granada. 

The Daily Circuit: UAE revels with Man City + Alef heads for IPO

👋 Hello from the Middle East!

Today in the Daily Circuit, we’re looking at Alef Education’s upcoming IPO, Redbird IMI’s $1.45 billion U.K. studio acquisition, ADQ’s new Jordan infrastructure fund and plaudits for Saudi Arabia’s “Norah” at the Cannes Film Festival. But first, on the football pitch with Mubadala’s Khaldoon Al Mubarak. 

The Premier League Trophy is coming home… to Abu Dhabi. Manchester City, owned by UAE Vice President Sheikh Mansour bin Zayed, won a record fourth straight Premier League title on Sunday, beating West Ham 3-1 in the final game of the season. City, as the club is known, is the first to clinch the champion title of English soccer’s top division four years in a row.

The team to beat in the U.K. is in many ways the UAE capital’s soccer team as well — from a business perspective at least. City is part of a multi-club ownership structure under City Football Group (CFG), owned by Sheikh Mansour and chaired by Mubadala CEO Khaldoon Al Mubarak. Other board members include attorney Martin Edelman, who has served on the board of Abu Dhabi’s listed developer Aldar as well as an advisor to Mubadala; UAE communications fixer Simon Pearce; oil and gas executive John MacBeath; Alberto Galassi, CEO of Italian yacht builder Ferretti Group; and Abdulla Khouri, whose entertainment and events group, Ethara, puts on the Abu Dhabi Grand Prix each year.

Since coming under Sheikh Mansour’s ownership in 2008, when he bought the club for $254 million, City has become the fifth most valuable soccer team in the world, worth just shy of $5 billion — and notably had the highest revenue of any club last year, according to Forbes. In 2019, American private equity firm Silver Lake invested $500 million for a 10% stake in CFG, and three years later made an undisclosed follow-on investment to increase its holding to around 18%. CFG holds stakes in 13 football clubs over five continents including New York City FC and Melbourne FC. Sheikh Mansour is the chairman of Mubadala, Abu Dhabi’s second largest sovereign wealth fund, whose holdings swelled to $302 billion in assets under management last year. 

IPO SCHOOL

Alef Education Holding is planning an IPO on the Abu Dhabi Securities Exchange as it seeks to expand its business beyond the UAE. The company, which develops digital tools that are broadly used in Emirati schools, said today that it will sell 20% of its shares during a subscription period that starts May 28, with trading on the ADX expected to start June 12. “We intend to solidify our market leadership at home and grow our presence across our target markets through continued investment in our digital capabilities, broadening our product offering and expanding our geographic footprint,” Alef CEO Geoffrey Alphonso said in a statement. First Abu Dhabi Bank and EFG Hermes UAE were appointed as lead managers and  bookrunners for the IPO.

STUDIO BOSS

RedBird IMI completed its $1.45 billion acquisition of All3Media, the largest independent production company in the U.K., after receiving approval from British, U.S. and German regulators. Under the agreement, Jeff Zucker, CEO of Abu Dhabi-backed RedBird IMI, becomes All3Media’s chairman, while All3Media CEO Jane Turton will continue to lead the company. The London-based studio, which is jointly owned by Warner Bros. Discovery and Liberty Global, has 50 production labels, including Studio Lambert, Raw, Two Brothers Pictures, Silverback Films, New Pictures and Neal Street Productions. Redbird IMI gave up on its bid to take over London’s Telegraph newspaper last month after encountering vigorous government opposition.

Mubadala: The infrastructure arm of Mubadala has made a “cornerstone” investment in PAG’s Asia Pacific renewable energy platform, known as PAG REN I, to facilitate businesses in the country buying solar power. Meanwhile, Mamoura Diversified Global Holding, a unit of the Abu Dhabi sovereign wealth fund, expects credit losses of about $315 million related to loans issued to Austria’s now-insolvent Signa real estate conglomerate, Bloomberg reports.

Public Investment Fund: Maxim Timchenko, CEO of Ukraine’s DTEK, said the energy company is in high-level talks with the PIF and other Saudi institutions regarding possible investments.

ADQ: The Abu Dhabi sovereign wealth fund established an infrastructure investment fund in Jordan that aims to spend $5 billion on development projects in the kingdom.

🛢️ Energy Finance: The Arab Energy Fund, which makes loans to Arab oil exporting countries, signed a preliminary agreement valued at $200 million with the Saudi Arabian Industrial Investments Co., known as Dussur, to finance so-called “greenfield” energy projects.

🔌 Extra Power: Kuwait signed contracts on Sunday to buy 500 megawatts of power from Oman and Qatar through the GCC Interconnection Authority.

📞 No Deal: Telecom Egypt called off its plan to sell a stake in Vodafone Egypt, explaining that the state owned company earns significant returns for the government from Vodafone shares.

📬 In the Mail: An investment group led by Phoenix Insurance and municipal services provider Milgam won the bidding to buy Israel’s financially distressed postal service from the govenrment for $124 million, less than half the price at which it was valued last year.

Christiana Maxion, UAE matchmaker and founder of dating app Maxion, announced her startup is looking to raise $1.5 million in seed investment to fund expansion in the Middle East.

Hadley Gamble interviewed actress and UNHCR Goodwill Ambassador Cate Blanchett in Cannes today.

Rakefet Russak Aminoach, former CEO of Bank Leumi, Israel’s largest bank, was named chairwoman of Hailo, a startup valued at $1.3 billion that develops AI chips.

📽️ New Chapter: The inclusion of “Norah,” Saudi Arabia’s first movie in the Cannes Film Festival official selection is the start of a remarkable chapter in Saudi Cinema, according to Jomana Al Rashid, CEO of Saudi integrated media group SMRG and Chairwoman of the Red Sea Film Festival. Director Tawfik Alzaidi’s debut film was picked for Un Certain Regard, a category of the festival that showcases unusual, innovative and non-traditional films.

🥊 Boxing Champ: Ukraine’s Oleksandr Usyk became the undisputed heavyweight boxing world champion after beating Britain’s Tyson Fury at Saudi Arabia’s Kingdom Arena in Riyadh early Sunday.

📷 Photo of The Day

🗓️ Circuit Calendar

May 18-26, Abu Dhabi, UAE. Abu Dhabi Comedy Week. Standup comics Dave Chapelle, Aziz Ansari, Bassem Yousef and Chris Tucker headline the first annual festival. Etihad Arena. 

May 20-21, New York City: SALT iConnections. SALT brings together more than 1,500 asset owners, asset managers and entrepreneurs for curated capital introductions and panel discussions. The Glasshouse.

May 20-22, Riyadh, Saudi Arabia: Future Aviation Forum. Airline executives, investors and government ministers gather for the third annual conference on the aviation industry. King Abdulaziz International Conference Center.

May 25-26, Dubai, UAE. Summer Blessings. Dubai festival celebrates the palm tree as the UAE’s national icon with live performances, date-themed events and artisan marketplace. Shindagha Museum.

May 29-31, Marrakech, Morocco: GITEX Africa. The second edition of the biggest tech and startup gathering in Africa. Place Bab Jdid. 

June 5, Hong Kong: Bloomberg Wealth Event. A gathering to bring actionable intelligence to portfolio managers and other dealmakers and analysts from asset managers and owners, family offices and hedge funds. Conrad Hong Kong. 

June 23-26, National Harbor, Maryland: SelectUSA Investment Summit. The highest profile event in the U.S. to facilitate business investment by connecting thousands of investors, companies, economic development organizations and industry experts to make deals. Gaylord National Resort and Convention Center.