Pay-TV operator OSN scraps plans for an initial public offering

Pay-TV operator's decision has come as a surprise to some analysts given the improvement in investor sentiment.

OSN had a 30 per cent increase in subscribers last year, reaching 734,000 households across the region, 29 per cent of them in the UAE. Jaime Puebla / The National

The Dubai based pay-TV operator OSN is abandoning a plan to sell shares in an initial public offering.

A spokesman confirmed that the company was no longer seeking to list but refused to provide further comment.

“There are no plans for an IPO,” said Olivier Sage, chief financial officer at OSN said in an earlier interview with Bloomberg. “We want to focus on growing our business and growing our subscriber base.”

Kuwait Projects Company (Kipco) which owns a 60.5 per cent stake in OSN, hired the private investment bank Rothschild to advise on the IPO back in June. Earlier this week, Arqaam Capital revised its valuation from US$2.5 billion to $4.3bn because of the growth expected in the pay-TV sector.

“They’re growing very quickly and the margin is rapidly expanding. If you take that into account in two or three years those multiples will sink in and it will be easier to do an IPO. They still have years of growth,” said Jaap Meijer, an analyst at Arqaam Capital.

“We believe it would be better for Kipco to wait with an IPO or a partial sale, as it continues to grow its subscriber base by over 20 per cent … and margin is expanding very quickly.” It still should be able to show consistent high double-digit growth over the next decade, in our view,” added Mr Meijer.

But the decision has come as a surprise to some analysts given the improvement in investor sentiment.

“Honestly today the market conditions are positive and there is liquidity in the market,” said Mohammed Ali Yasin, head of brokerage at Shuaa Securities. “We really need to sit with the investment banks and see what is preventing those companies from coming to the market and listing.”

In August, OSN acquired Pehla Media & Entertainment, bringing its channel offerings up to 140. It is now focusing on growth in Qatar and has intentions to enter the Libyan market.

Last year, OSN had a 30 per cent increase in subscribers – reaching 734,000 households across the region, 29 per cent of them in the UAE.

Arqaam said OSN’s revenues grew 24 per cent and its subscriber base grew 22 per cent during the first nine months of this year.