Supermarket chain franchisee Spinneys plans IPO, Marketing & Advertising News, ET BrandEquity

A franchisee of the Spinneys supermarket chain, which operates in the United Arab Emirates and Oman, announced plans for an initial public offering (IPO) on the Dubai Stock Exchange and said on Tuesday it plans to expand into Saudi Arabia this year.

Shareholder Al Seer Group LLC plans to sell 900 million shares of Spinneys 1961 Holding plc, representing a 25% stake, the company said in a filing. This would be the first listing of a supermarket chain operator in the UAE.

“It is the right time for us to invite investors to participate in this business,” CEO Sunil Kumar told Reuters.

The company plans to open its first store in Riyadh in the first half of this year and open three more in the capital and Jeddah by the end of the year.

“These are the two cities we are targeting because that is where our customer base – affluent customers with high disposable income – lives,” Kumar said, pointing out Saudi Arabia, the Gulf’s largest economy, and the United Arab Emirates a multitude of unused possibilities offer opportunities.

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The Gulf region has seen a number of IPOs this year, with public parking operator Parkin, flour milling company Modern Mills and healthcare company Avalon Pharma coming to market, among others.

Companies based in the GCC raised $11 billion in IPO proceeds in 2023, accounting for 40% of the proceeds raised in EMEA in 2023, LSEG data showed.

Reuters first reported on the supermarket chain's IPO plans in September, citing sources. As Reuters previously reported, UAE-based hypermarket and mall operator Lulu is also expected to go public later this year.

The bookbuilding process begins on April 23 and ends on April 29 for retail and other investors in the UAE and April 30 for professional investors. The shares are expected to begin trading on the Dubai Financial Market next month.

After the IPO, the company plans to pay semi-annual dividends starting in October – and maintain a dividend payout ratio of 70% of annual distributable profit after tax.

Emirates NBD Capital, Merrill Lynch International and HSBC Bank Middle East Limited have been appointed joint global coordinators and joint bookrunners, while EFG Hermes UAE Limited has also been appointed joint bookrunner.

Spinneys operates 75 premium grocery retail supermarkets under the Spinneys, Waitrose and Al Fair brands in Oman and the United Arab Emirates, where the company plans to open new stores this year.

Revenue rose to 2.87 billion dirhams ($781.61 million) in 2023, driven by increasing online penetration and an expansion of its store presence in the UAE, it said. ($1 = 3.6719 UAE dirham) (Reporting by Federico Maccioni; Editing by Jamie Freed, Sherry Jacob-Phillips and Miral Fahmy)

• Published on April 17, 2024 at 11:48 AM IST

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