HYPERMARKET chain operator Lulu Retail Holdings’s US$1.72 billion Abu Dhabi initial public offering drew orders worth US$37 billion, including from global investors Vanguard Group and Singapore sovereign wealth fund GIC.
Lulu International Holdings sold 3.10 billion shares, or a 30 per cent stake, at 2.04 dirhams apiece, the top of a marketed range. Based on that offer price, the firm will have a market capitalisation of 21.1 billion dirhams when it lists on Nov 14.
Apart from Vanguard and GIC, sovereign entities from Gulf Cooperation Council countries – including Saudi Arabia’s Public Investment Fund and Hassana, Qatar Investment Authority and Kuwait Investment Authority – invested in the offer, founder Yusuff Ali said at a press conference in Abu Dhabi on Wednesday (Nov 6).
Lulu previously said it had secured commitments from Saudi Arabia’s Masarrah Investment, Abu Dhabi Pension Fund, Bahrain Mumtalakat Holding, Emirates International Investment, and Oman Investment Authority. Those funds bought shares worth just over 1 billion dirhams.
The retailer initially planned to sell a 25 per cent stake and raise up to US$1.43 billion, but increased the size of the IPO, citing strong investor interest. The deal had demand for all shares an hour after books opened last week, eclipsing oil services firm NMDC Energy’s US$877 million offering as United Arab Emirates’ biggest IPO of the year.
The IPO marks the latest in a series of private sector listings across the Middle East, offering investors a broader choice beyond state-owned assets. Delivery Hero’s Middle Eastern unit Talabat and IT services firm Alpha Data are also planning listings in the UAE this year.
High-end supermarket chain Spinneys 1961 Holding raised US$374 million from a Dubai listing in May, though the stock had a relatively muted debut and continues to trade around the offer price.
Lulu 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, Citigroup, Emirates NBD Capital and HSBC Holdings are the joint global coordinators on the offering. Moelis is an advisor on the deal. BLOOMBERG
