The IPO of Oil Refineries Haifa was completed yesterday at a value of $1.57 billion (NIS 6.43 billion), while the average value of the flotation over its two stages - institutional and public - was $1.53 billion. The share price was set at NIS 3.30, while institutional investors will pay NIS 3.10 per share. Israel Petrochemical Enterprises Ltd. (TASE:PTCH), and Israel Corp. (TASE: ILCO) are now the largest shareholders in Oil Refineries Haifa, with a 46% stake. 10% has been allocated to the public, in addition to the 44% allocated to investment institutions in the institutional tender. In all, 54% of Oil Refineries Haifa has been distributed to public ownership by the IPO.
Yesterday’s public offering was oversubscribed by 23.5%, more than 5,500 subscribers. This represents an unprecedented level of public participation in a flotation on the capital market. The flotation also drew substantial interest from foreign investors, who purchased more than 22% of the stock on offer in the first stage.
The sale price in yesterday’s public offering reflects a premium of more than 50% on the minimum price set in the first stage of the flotation (NIS 2.20 per share), and a 22% premium on the price of NIS 2.70 per share in last week’s institutional tender, which reflects a company value of $1.2 billion.
Investment institutions will purchase their stakes at NIS 3.11 per share, the highest possible effective price -15% higher than the tender price.
Commenting on the completion of the Oil Refineries Haifa IPO, Minister of Finance Abraham Hirchson said, “With the successful completion of the privatization of Oil Refineries Ashdod and Oil Refineries Haifa, the reform of the energy sector is now complete. This marks the start of a new era of private competition for refinery business, for the benefit of the economy and the nation. I congratulate the Petrochemical-Israel Corp group on this outstanding investment in the Israeli economy.”
Published by Globes [online], Israel business news - www.globes.co.il - on February 20, 2007
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