UAE retail giant Lulu Group said on Monday it will sell 25 percent of its shares at a par value of 0.051 dirhams per share in an initial public offering (IPO).
The company plans to sell more than 2.582 billion shares (2,582,226,338) in three phases starting on Oct. 28 and ending on Nov. 5, according to a prospectus published in the UAE Breaking News on Monday.
Lulu Retail Holding is listed on the Abu Dhabi Securities Exchange. The listing is scheduled for Nov. 14, 2024. The offer price range will be announced on the same day or before the offer opens on Oct. 28.
The typical lead recipient banks are Abu Dhabi Commercial Bank and First Abu Dhabi. The joint lead managers are Abu Dhabi Commercial Bank, Emirates NBD Capital, First Abu Dhabi Bank, HSBC Bank Middle East and EFG Elmes UAE. The recipient banks are First Abu Dhabi Bank, Dubai Islamic Bank, Emirates Islamic Bank, Abu Dhabi Commercial Bank, Mashreq and Emirates NBD.
The UAE has seen a number of IPOs in recent years, both public and private, including Dubai Taxi Corporation, Salik, Al Ansari Exchange, Pure Health, Investcorp Capital, Phoenix Group and Adnoc Companies.
Demand from private and institutional investors has been exceptionally strong for previous IPOs. Analysts are confident that Lulu’s share sale will continue to receive an overwhelming response from investors next week.
Lulu Group is one of the largest retailers in the UAE and GCC region with over 50,000 employees. Investors have been eagerly awaiting the company’s IPO for its stake in the retail giant.
ADQ had bought a 20% stake in the company for $1 billion in 2020, which helped the retailer expand into new markets.
As part of the first tranche, 258,222,000 shares will be offered, representing 10% of the offering. Each subscriber, other than the eligible employees, is guaranteed at least 1,000 shares and each eligible employee is guaranteed at least 2,000 shares.
Under the second tranche, Lulu Retail plans to sell 2,298,181,441 shares, representing 89% of the shares to be sold. As part of the third tranche, more than 25,822,000 shares, representing 1% of the shares offered, will be sold.
According to the prospectus, the selling shareholders have reserved the right to amend the public offering.
The selling shareholders are subject to a lock-up period of 180 days following listing on the Abu Dhabi Securities Exchange.
Lulu Group is the largest general retailer in terms of sales area, revenue and number of stores in 2023 with stores across all GCC countries. According to market consultants, the group is the second largest grocer in the UAE and the largest in Oman.
The largest and fastest growing pan-GCC retailer in Saudi Arabia as well as Qatar, Bahrain and Kuwait. Currently has a strong omnichannel presence in the form of three formats – hypermarkets, express stores and minimarkets.
By August 2024, the institution operated 240 shops, comprising 116 hypermarkets, 102 explicit shops and 22 mini markets with 103 shops placed withinside the UAE, fifty six in Saudi Arabia and eighty one throughout different markets.
The institution`s general promoting area as of December 31, 2023, turned into about 1.three million rectangular metres, which turned into round three instances better than the common promoting area of its indexed friends with inside the GCC.
The retailer, on common, served over 600,000 every day buyers each day in 2023. Sourcing merchandise from eighty five countries, it operates a community of 21 distribution centres with inside the GCC to assist its retail operations.