The operator of supermarkets in the United Arab Emirates, Spinneys 1961 Holding PLC, has declared that it plans to move forward with an IPO (Initial Public Offering) on the Dubai Financial Market.
The parent company of Spinney, Al Seer Group, is the selling shareholder and anticipates selling a quarter of the company’s outstanding capital, or 900 million shares.
According to a release from the company, the DFM listing is scheduled for May 9 and the IPO’s subscription period will start on April 23.
Retail investors in the United Arab Emirates will be able to participate in the offering with 5% of the shares, or 45 million shares, in the first tranche. Professional stakeholders will have access to 855 million shares in the second tranche.
The creator and chairman of Spinneys, Ali Saeed Juma Al-Bwardy, said, “Ours is a brand with tremendous ambition, positioned to prosper in the most attractive and fast-growing markets in the GCC. We are eager to start a new chapter and share our exciting new opportunity with a larger shareholder base. Our IPO offers investors the chance to participate in our next phase of growth.”
According to the statement, the offer price, also known as the price per share, will be disclosed before the offer period and will be valued in Emirati dirhams.
The IPO has chosen Rothschild & Co Middle East Limited as its independent financial advisor, and Emirates NBD Capital PSC as its listing advisor.
In the UAE and Oman, the company runs 75 upscale grocery retail stores that operate under the Spinneys, Waitrose, and Al Fair names. In the first half of 2024, it also intends to launch its first store in Saudi Arabia.
To capitalise on the UAE’s strong economic environment, the company projects that the country’s GDP will expand by 3.4% annually between 2022 and 2028 and that its high average disposable income per capita will rise by 2.3% over the same time frame.
The population of the United Arab Emirates is expected to rise by 0.7% between 2022 and 2028, but the supermarket chain anticipates that its target market of wealthy people will grow at an annual rate of 4.3% during that same time frame.
It is projected that this expansion will fuel a persistent demand in the UAE for fine dining.
Likewise, the group’s foray into the Saudi market, the biggest economy in the Gulf Cooperation Council (GCC), would focus on setting up shops in the most populated cities in the Kingdom, Jeddah and Riyadh.
According to Sunil Kumar, CEO of Spinneys, “We have a lot to be thrilled about this year as we commemorate the 100th anniversary of the Spinneys brand in the region. We also have plans to enter the growing Saudi market, where we see great potential for our business.”
With a forecasted growth rate of 6.7% in Riyadh and Jeddah, the company stated that the market for affluent shoppers in the grocery retail segment is outpacing the expansion of the Kingdom’s entire food industry.
After Parkin, a firm that provides public parking services, went public last month for USD 429 million, this announcement is the second DFM listing of 2023.
With 165 oversubscriptions and USD 71 billion in demand, Parkin’s IPO broke all previous records for Dubai.