ABU DHABI: Lulu Retail Holdings Plc is looking to raise as much as 5.27bil dirhams (US$1.43bil) from its initial public offering (IPO), in what’s set to be the United Arab Emirates’ (UAE) biggest listing of the year.
The hypermarket chain operator has set a price range of 1.94 dirhams to 2.04 dirhams per share, according to a statement yesterday.
The top end of the price range implies a market capitalisation of 21.1bil dirhams.
Lulu International Holdings plans to to sell 2.58 billion shares, or a 25% stake in the firm. Final pricing is expected on Nov 6, and the shares are scheduled to begin trading on Nov 14.
Institutional investors, including Abu Dhabi Pension Fund, Bahrain Mumtalakat Holding Company Co BSC, Emirates International Investment Company LLC and Oman Investment Authority have agreed to subscribe for shares worth about 753 million dirhams.
The Middle East has seen a flurry of new share sales this year, which have raised just shy of US$8bil, with the UAE accounting for around 30%, despite escalating conflicts in the region.
The Lulu sale would eclipse the US$877mil share offering from oil services firm NMDC Group, which is so far the country’s biggest IPO this year.
Lulu operates one of the Middle East’s largest hypermarket chains. It reported a profit of US$192mil last year, and aims to maintain a dividend payout ratio of 75%.
Its net profit margins are expected to reach 5% over the medium term, up from 2.6% in 2023, its chief executive officer told Bloomberg News.
The company, founded by Indian entrepreneur Yusuff Ali, plans to open about 90 stores across the Gulf over the next five years, with Saudi Arabia and the UAE slated as its main expansion markets.
Abu Dhabi Commercial Bank PJSC, Citigroup Inc, Emirates NBD Capital and HSBC Holdings Plc are the joint global coordinators on the sale. Moelis & Co. is an advisor on the deal. — Bloomberg
