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Supermarket chain Spinneys Dubai is planning to offer up to a 25% stake in an IPO on the DFM,according to the prospectus (pdf) and intention to float (pdf) published yesterday. Al Seer Group will be selling 900 mn of its shares in the IPO, according to the statement. The IPO will be among the first by a family-owned business in the UAE. The business is owned by the Albwardy family.
Background: News of Spinneys listing on the Dubai bourse first broke back in September 2023, when it invited banks to pitch for roles in the offering and reportedly hired Rothschild & Co to advise on the IPO. Sources had said the supermarket chain could list up to 30% of its shares on the DFM in 2Q 2024.
The book-building process starts next Tuesday, 23 April, with the subscription period for retail investors concluding on 29 April. Institutional investors’ subscription period will wrap a day later on 30 April. 95% of the shares on offer will be allocated to institutional investors, while 5% will go to retail investors.
Shares are expected to begin trading on 9 May, according to the prospectus.
The supermarket chain is expanding into the KSA for the first time: Spinneys plans to inaugurate a store in Saudi Arabia in 1H 2024 to fuel growth, it said in its intention to float. It plans to open another three by the end of the year and at least four new stores in the Kingdom every year for the next five to 10 years, CEO Sunil Kumar told Bloomberg.
Fast facts: Spinneys’ first ever store was established in Alexandria, Egypt, in 1924, by Arthur Spinney. It later established its presence in the UAE in the 1960s, before expanding into Oman in 2003 with the operation of Al Fair. It also brought Waitrose into the UAE in 2008. While the Spinneys brand name is also used in Egypt, Lebanon, Syria, and Iraq, this is merely through trademark licensing agreements inked with Spinneys Dubai.
It also has plans to launch a new e-commerce platform dubbed Spinneys Swift this year, as well as a new dining concept it will call “The Kitchen, by Spinneys,” it said.
First glimpse into Spinneys’ earnings: Spinneys saw its bottom line increase 18.7% y-o-y to AED 254 mn in 2023, while revenues grew to AED 2.87 bn, according to the disclosure. The company plans to maintain a 70% dividend payout ratio every year, it said, adding that it will be paying them on a semi-annual basis in April and October of each year.
Not the only hypermarket listing in the UAE expected this year: Supermarket chain operator LuLu Group International also reportedly tapped Abu Dhabi Commercial Bank, Citigroup, Emirates NBD, and HSBC Holdings last month to work on its planned IPO on the ADX this year. The offering could raise as much as USD 2 bn, and is expected to happen in 2H 2024.
And we have a bigger pipeline of IPOs: At least four other companies have expressed plans to move forward with IPOs this year, including edtech firm Alef Education, which has also already tapped banks to advise on their transactions. Talk of Etihad Airways potentially tapping public markets also gained traction, while Amanat Holdings is also reportedly looking to list its healthcare unit, and shisha producer Advanced Inhalation Rituals is also eyeing an IPO in 1H 2024.
REMEMBER- The country’s first IPO of the year saw Dubai’s Parkin raise some AED 1.57 bn in a blockbuster listing on the DFM that saw 165x oversubscription back in March.
Advisors: HSBC Holdings and EFG Hermes are acting as joint lead managers and joint bookrunners alongside Emirates NBD, which is the listing advisor and lead receiving bank of the IPO. Al Maryah Community Bank, Commercial Bank of Dubai, First Abu Dhabi Bank and Wio Bank are also acting as receiving banks, while Emirates NBD Capital, Merrill Lynch International and HSBC Bank Middle East are joint coordinators and bookrunners. Rothschild & Co is acting as independent financial advisor.
