Food delivery company Talabat will proceed to list in Dubai, its Berlin-headquartered parent Delivery Hero SE confirmed on Sunday, as it unveiled plans to pursue an initial public offering of 15 per cent of the total shares it indirectly holds in the Middle East business.
In what could be among the region's biggest initial public offerings of the year, Delivery Hero aims to list Talabat on the Dubai Financial Market in mid-December 2024, with proceeds set to be used for general corporate purposes and to optimise its capital structure.
The share sale could raise about $1 billion, Bloomberg News had reported in September. Reuters reported on Friday that the initial public offering of Dubai-based food delivery company Talabat was set to be launched as soon as this week, citing sources familiar with the undisclosed plans.
Talabat currently plans to pay a minimum dividend of about $100 million in April relative to fourth quarter financial results, plus another $400 million in two installments in October 2025 and April 2026, according to the statement. Thereafter, dividends are expected to be paid twice each calendar year, with Talabat targeting a net income payout of 90 per cent.
High valuation
It was known earlier that the listing was penciled in by its German parent for the fourth quarter of this year, in a market valuation that could see the Middle East business - which operates in eight countries across the region - being valued at between $9 billion (Dh33 billion) and $12 billion (Dh44 billion), Bloomberg estimates.
The Talabat offering comes amid a flurry of new share sales in the Middle East, with hypermarket chain operator Lulu Retail latest to raise $1.72 billion ahead of publicly listing a 30 percent stake in Abu Dhabi, implying a market valuation on listing of Dh21.07 billion.
Talabat reported $6 billion in gross merchandise volumes in 2023, up from just under $4 billion in 2021. Its free cash flow increased by 64 per cent to $226 million in the first half of the year from last year. The Dubai IPO could value Delivery Hero's "crown jewel" at as much as $12 billion including debt, according to a Bloomberg Intelligence report.
However, the entry of aggressive competitors could dent Talabat's market share and valuation, analyst Tatiana Lisitsina wrote. Delivery Hero has been cementing its position in the Middle East through acquisitions. It bought the Indian firm Zomato's food delivery business in the UAE in 2019, and the online grocery platform InstaShop in 2020. The Talabat brand also has a presence in Bahrain, Egypt, Oman, Qatar, Kuwait, Iraq and Jordan.
- with inputs from Bloomberg, Reuters
