Delivery Hero’s Talabat to divest 15% stake via IPO

Talabat Holding, Delivery Hero’s Middle East business, said on Monday that it plans to sell a 15 per cent stake through an initial public offering (IPO) on the Dubai Financial Market (DFM) in what is set to be one of the biggest listings in the region.

Delivery Hero MENA is offering 3.5 billion shares in Talabat at a nominal value of Dhs0.04 apiece, representing 15 per cent of the company’s total issued share capital.

The delivery platform, which boasts more than six million active customers and over 119,000 active riders, is offering the shares in two tranches – to institutional investors and retail investors – between November 19 and November 28.

The final offer price will be determined at the end of the book-building process, with a trading debut on DFM scheduled for December 10.

Founded in 2004 in Kuwait, Talabat has expanded to serve customers in the UAE, Oman, Qatar, Bahrain, Jordan, Iraq and Egypt, with more than 65,000 active partners as of the end of September 2024.

“Having begun our story in 2004 out of Kuwait, Talabat has since transformed into a home-grown technology-driven food, groceries and retail delivery champion with deep local roots. Today, we are the leading MENA partner of choice for more than 65,000 restaurant and grocery businesses, satisfying the everyday needs of over six million monthly active customers across our eight regional markets,” said Tomaso Rodriguez, CEO of Talabat.

The company reported $6bn in gross merchandise volumes in 2023, up from just under $4bn in 2021. Free cash flow surged by 64 per cent year-on-year to $226m in the six months ended June 2024.

To attract investors, Talabat plans to pay a minimum dividend of about $100m in April relative to Q4 financial results, plus $400m in two instalments in October 2025 and April 2026. Thereafter, the company said it expects to pay dividends twice each calendar year, targeting a net income payout of 90 per cent.

Talabat has hired Emirates NBD Capital, J.P. Morgan Securities and Morgan Stanley & Co International PLC as joint global coordinators and joint book-runners.

PwC said the outlook for the GCC IPO market remains buoyant. A healthy pipeline of companies from a diverse range of sectors is busy preparing for their upcoming listings across the region.

The delivery firm’s IPO joins a wave of private company listings in the Middle East this year, with IT services firm Alpha Data considering listing in Abu Dhabi. Bahrain’s AlAbraaj Restaurants Group is preparing for an IPO on the local bourse, while Saudi Arabia’s capital markets regulator recently green-lit IPOs for cosmetics retailer Nice One and hospital operator Almoosa.

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