Showtime in talks with banks over London IPO

SHOWTIME Arabia is in talks with top global investment banks concerning a possible listing on the London Stock Exchange (LSE), Arabian Business can reveal. The floatation could value the group at up to US$1.8 billion.

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By  Rhys Jones Published  August 7, 2005

SHOWTIME Arabia is in talks with top global investment banks concerning a possible listing on the London Stock Exchange (LSE), Arabian Business can reveal. The floatation could value the group at up to US$1.8 billion. The company’s shareholders, the American media group Viacom and the Kuwait Projects Company (Kipco), have asked advisors to explore an initial public offering (IPO) in London later this year. “Goldman Sachs and Morgan Stanley are working with Showtime on the practicalities of an IPO,” Andrew Hey, a share-offer advisor and financial director at London’s Citigate Dewe Rogerson — which is working with Showtime on the IPO — told Arabian Business. “[The three parties] have met on a periodic basis to discuss the possibility and review the company’s corporate strategy. The banks are working with Showtime to review options, one of which certainly is an IPO,” he added. The Middle East’s biggest satellite pay-television operator revealed it had considered an IPO late last year. However, it was thought the company would be listed in either Bahrain or Dubai, and not in the UK capital. “It’s not surprising that this story has resurfaced, but the truth is that the company has various options for the future,” explained Hey. “Floating on the LSE is one option,” he added. Showtime is one of a range of assets in the Kipco stable. Kipco is Kuwait’s largest private sector company with more than US$10 billion under management or control, and a portfolio of some 70 companies. These include the United Gulf investment bank and the mobile phone services provider Wataniya Telecom. Shares in Kipco were halted in March when the Kuwait Stock Exchange (KSE) asked for clarification over market rumours that the company was set to announce the Showtime IPO. At the time Showtime said in a statement: “Under the securities laws in some markets in which Showtime Arabia may ultimately offer shares, Kipco is unable to release information about an IPO of Showtime Arabia shares until an official launch of the financial transaction.” It added: “There is no assurance that the potential public offering by Showtime Arabia will be completed and, if completed, on what terms or when it would be completed.” Earlier this year a range of bankers were selected to make recommendations about pricing Showtime shares, the choice of stock exchange, and the best way to structure the company’s capital in light of its business and financial objectives. Morgan Stanley and Goldman Sachs were chosen from a group of banks including Citigroup, Bank of America, Credit Suisse First Boston, Deutsche Bank and HSBC. Faisal Al Ayyar, managing director and chief executive, Kipco, said at the time that the banks’ proposals identified Showtime’s current market penetration and potential, strong management team, high average revenue per subscriber and fixed exclusive long-term programming agreements with major Hollywood studios as key strengths. Kipco recently posted a 31% rise in 2005 half-year net profits to US$58.6 million, a US$13.7 million increase compared with its half-year profit of US$44.8 million in 2004. Showtime launched with six channels in 1996. It has expanded its distribution across the Middle East and North Africa region and today offers more than 50 channels of Western entertainment with Arabic subtitles. It operates in more than a dozen countries, including Egypt, Iraq and Saudi Arabia, offers branded sports, entertainment and movie channels to thousands of customers on a subscription and one-off basis. Among the channels available through Showtime are the Viacom-owned MTV, Cartoon Network and the Discovery Channel. It also provides access to films and live sport

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