Yahoo Finance Spinneys’ $375 Million Dubai IPO Draws Franklin Templeton
(Bloomberg) -- The family behind high-end supermarket chain Spinneys is seeking to raise as much as 1.38 billion dirhams ($375 million) in a rare private sector listing in Dubai that’s drawn Franklin Templeton as a cornerstone investor.
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Al Seer Group LLC is selling 900 million shares at 1.42 dirhams to 1.53 dirhams apiece in the initial public offering that values the grocer at as much as 5.5 billion dirhams, according to a statement. Investors snapped up all shares on offer in minutes, according to terms of the deal seen by Bloomberg News, indicating continued strong demand for regional listings.
The subscription period for Spinneys 1961 Holding plc will run until April 30 for institutional investors and close a day earlier for retail buyers. The final price is set to be announced on May 1, with shares expected to start trading a week after.
Emirates International Investment Company LLC and two subsidiaries of Franklin Templeton will be cornerstone investors in the IPO, agreeing to subscribe for a total of 275 million dirhams.
Middle Eastern listings have attracted a smattering of interest from international investors in the past. BlackRock Inc., Vanguard Group and Fidelity Investments bought into Dubai Electricity & Water Authority’s 2022 IPO, while Fertiglobe plc’s Abu Dhabi listing the prior year drew Singapore’s GIC Pte and U.S. hedge fund manager Jeff Ubben.
Read More: BlackRock to Vanguard, Global Funds Rush to Middle East IPO Boom
Spinneys is among the first batch of family-owned businesses to go public in the United Arab Emirates. State-owned companies have dominated listing activity in the past few years as governments seek to fund the diversification of their economies away from fossil fuels.
Last year, money exchange firm Al Ansari Financial Services PJSC listed in Dubai in one of the first IPOs by a private company in the Gulf country, while investment vehicle Investcorp Capital Plc followed in Abu Dhabi in November.
The listing will test investor appetite for privately-owned companies seeking to grow their businesses. Spinneys plans to maintain a dividend payout ratio of 70% of annual distributable profits after tax for fiscal 2024 and the following years. The company reported a profit of 254 million dirhams in 2023, up 19% from the prior year.
Owned by the Al Bwardy family, Spinneys opened its first store in 1961 and now operates 75 supermarkets under the Spinneys, Waitrose and Al Fair brands in the UAE and Oman. It plans to expand into Saudi Arabia and set up four stores by the end of the year, its chief executive officer said last week.
The grocery chain is counting on the UAE’s increasingly affluent population as well as its Saudi expansion for growth opportunities.
Emirates NBD Capital, Bank of America Corp., and HSBC Holdings Plc are joint global coordinators for Spinneys’ IPO, while Rothschild & Co. is the independent financial adviser.
--With assistance from Kateryna Kadabashy.
(Updates with cornerstone investors in third paragraph)
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