Abu Dhabi’s ADNH Catering plans to list 40% on local bourse

Abu Dhabi National Hotels (ADNH Group) plans to sell a 40 per cent stake in its catering business in an initial public offering (IPO) on the local bourse, joining a busy pipeline of new share sales in the Middle Eastern capital.

The owner of hotels, including the Ritz-Carlton and Park Hyatt in Abu Dhabi, is offering 9 million shares in ADNH Catering, representing 40 per cent of the company’s total issued share capital.

ADNH Catering appointed Citigroup and First Abu Dhabi Bank as joint global coordinators and bookrunners for the IPO, while Emirates NBD Capital and Abu Dhabi Commercial Bank are joint bookrunners.

“Since 1979, ADNH Catering has been a core component of the growth of the UAE’s hospitality industry, partnering with government and private sector clients across food services and support services,” said Khalaf Sultan Al Dhaheri, chairman of ADNH Catering.

“Given the size of the market opportunity, which benefits from strong macroeconomic tailwinds and a clear growth strategy to create a leading GCC platform, ADNH Catering offers investors a truly compelling opportunity.”

The catering firm, which provides food, cleaning, support services and manpower supply, is offering the shares in two tranches – to institutional investors and retail investors – between October 7 and October 15.

ADNH Catering said the final offer price will be determined after the book-building period, with a listing on the Abu Dhabi Securities Exchange expected as early as next month. Founded in 1979, it operates in the UAE and Saudi Arabia via a joint venture with Compass Group and Al-Rushaid Petroleum Investment Company.

The catering firm’s revenues reached $444m (Dhs1.63bn) in 2023, and it registered a profit of Dhs422.5m during the period under review.

To attract investors, ADNH Catering plans to pay a Dhs180m performance-linked dividend from 2025 through 2026. The company also plans to increase the previous year’s dividend by a minimum of 5 per cent in December 2026.

A wave of listing activity in the GCC region, which gathered steam in late 2021, continues unabated as governments seek to diversify their economies away from oil by selling stakes in state-owned enterprises.

Oman state-owned energy giant OQ seeks to raise OMR780m ($2.02bn) from the IPO of its exploration and production business in what is the sultanate’s biggest offering on record. OQ Exploration and Production (OQEP) is offering 2 billion shares, equivalent to 25 per cent of the company’s total issued share capital.

Meanwhile, Saudi Arabia’s Fourth Milling Company (MC4) is set to raise $229m from an IPO on the local stock exchange, adding to a string of listings in the kingdom and the wider GCC region.

Read: OQ Exploration and Production seeks to raise $2bn from IPO