Wednesday, Sep 22, 2010

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DUBAI (Zawya Dow Jones)--Dubai-based retailer Axiom is planning to sell up to 35% of the company in an initial public offering and pursue a Nasdaq Dubai exchange listing, in what would be the first public share sale in the United Arab Emirates in over two years, sources familiar with the deal said Wednesday.

"The IPO could happen in the fourth quarter of the year and value the entire company as much as 4 to 5 billion dirhams ($1.36 billion)," one source told Zawya Dow Jones.

Axiom, a Dubai-based mobile phone distributor, is currently 40%-owned by TECOM Investments, part of Dubai Holding Commercial Operations Group, or DHCOG, according to Zawya.com.

Nasdaq Dubai listing rules stipulate that at least 25% of a company's capital must be publicly owned. In comparison, Dubai Financial Market regulations require at least 55% of the company to be owned by the public.

Deutsche Bank has been mandated as arranger on the deal with Dubai-based investment bank Shuaa Capital and Citi joint book runners, the source said.

Shuaa Capital and Axiom declined to comment. Deutsche Bank and Citi weren't immediately available for comment.

Axiom's IPO and listing would prove a key litmus test for capital markets in the region given that stock markets have been blighted by dwindling volumes recently amid an economic downturn in the Persian Gulf.

The total value of IPOs in the first six months of the year was steady at $1.2 billion, compared with the year earlier period, while 43.75% of deals and 57% of the capital raised in the Mena region originated in Saudi, according to Zawya's quarterly IPO monitor released in July.

"This [Axion IPO] could be a good test for the local markets," said Haissam Arabi, chief executive and fund manager at Gulfmena Alternative Investments. "A few months back the situation was very different, but conditions have improved both globally and in the region. We could see a yearend markets rally as we head into a new cycle," he added.

-By Mirna Sleiman, Dow Jones Newswires; +9714 446-1698; mirna.sleiman@dowjones.com

(Nikhil Lohade in Dubai contributed to this article.)

Copyright (c) 2010 Dow Jones & Co.

(END) Dow Jones Newswires

22-09-10 1038GMT