Delivery Hero SE has revealed plans to list its Talabat unit in Dubai in what could be among the biggest initial public offerings of the year.
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(Bloomberg) — Delivery Hero SE has revealed plans to list its Talabat unit in Dubai in what could be among the biggest initial public offerings of the year.
The German food delivery company plans to sell a 15% stake in its Middle East subsidiary, according to a statement on Sunday, retaining a majority interest. It may amend the offering size subject to the necessary approvals from the Securities and Commodities Authority of the United Arab Emirates, it added.
The share sale could raise nearly $1 billion, Bloomberg News reported in September.
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The listing is expected to take place in mid-December, the Berlin-based company said, with the proceeds to be used for general corporate purposes and to improve its capital structure.
Talabat currently plans to pay a small dividend of about $100 billion in April against the financial results of the fourth quarter, and another $400 million in two installments in October 2025 and April 2026, according to the statement. After that, dividends are expected to be paid twice per calendar year, with Talabat aiming for a 90% net profit.
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The IPO comes amid a flurry of new share sales in the Middle East. Oman’s state-owned energy company raised a record $2 billion by listing its exploration and production unit last month, and is preparing to sell shares in its methanol business.
Private companies are also quick to enter. Lulu Retail Holdings Plc has raised $1.72 billion in the United Arab Emirates’ largest listing. IT services company Alpha Data is eyeing an Abu Dhabi listing, while online cosmetics retailer Nice One, healthcare provider Almoosa Health, and technology company Ejada are planning IPOs in Saudi Arabia .
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Talabat forecasts $6 billion in net sales by 2023, up from just under $4 billion in 2021. Its free cash flow rose 64% year-on-year to $226 million in the six months ended June.
The Dubai IPO could value Delivery Hero’s “crown jewel” at around $12 billion including debt, according to a Bloomberg Intelligence report.
However, the entry of aggressive competitors could limit Talabat’s market share and valuation, writes analyst Tatiana Lisitsina. He gave the example of the Saudi Arabian company Jahez, whose profit outlook was hit by the entry of the Chinese food delivery giant Meituan. Although Talabat does not operate in the kingdom, the lucrative Gulf markets could attract competitors, Lisitsina noted.
Delivery Hero has been strengthening its position in the Middle East through acquisitions. It bought Indian food delivery company Zomato in the UAE in 2019, and online grocery platform InstaShop in 2020. The Talabat breed is also found in Bahrain, Egypt, Oman, Qatar, Kuwait, Iraq and Jordan.
—Courtesy of Gabriela Mello.
(Updates with details from the second section.)
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