Dubai: The Gulf F&B giant Americana Restaurants has set a price range of Dh2.50 to Dh2.62 per share for its ambitious IPO. This sets up the company's equity value at between Dh21.06 billion to Dh22.07 billion (or SR21.48 billion to SR22.58 billion) as the company heads for a dual listing on ADX and Saudi Tadawul.
Assuming all the shares are sold, the size of the IPO will be Dh6.32 billion to Dh6.62 billion (or equivalent to SR6.44 billion to SR6.77 billion). As of now, 5 per cent of the total offering will be allocated to UAE-based retail investors, up to 10 per cent for Saudi retail buyers, and 85 per cent to institutions.
The subscription period will run from November 14 to 21 for retail investors and November 22 closing for institutional buyers. The company - the biggest restaurant operator in the Gulf and wider Middle East - plans to float 30 per cent of the equity.
This will make Americana the biggest IPO on Saudi Tadawul this year. On ADX, that mantle falls on Borouge.
The current shareholding in Americana is led by Mohammed Alabbar, founder of Emaar and noon, with the Saudi wealth fund PIF. (This is done through their jointly owned vehicle Adeptio Investments AD.)
The final price will be determined through a bookbuilding, which starts today, and likely to be announced November 23. The completion of the offering and listing admission is expected to take place December 6.
"We can expect investors to take a big bite out of the Americana IPO," said Oliver Schutzmann, CEO of Iridium Advisors. "The company has a well-diversified business model, with 12 leading restaurant brands operating across a dozen countries. The company's growth and financials are solid, which should give investors confidence in the business.
Additionally, there appears to be scope for steady future growth as there are plenty of opportunities in underpenetrated markets, and the company's business is relatively resilient to inflationary concerns.
From 2023, the company expects to bring in an annual dividend distribution policy, and pay out a minimum of 50 per cent of net profit attributable to the parent entity, with the intention to further distribute any cash not specifically reserved for general corporate purposes, growth investment or M&A activity.
The first full-year dividend from 2023 would be payable in the six months ended June 30, 2024.
- The selling shareholders in Americana 'reserve the right' to increase the size of the UAE retail offer and reduce that for institutional investors at any time prior to the end of the subscription period.
- They will not, however, increase the size of the UAE retail offer above 10% of the total offer or reduce the size of the institutional offer to less than 80%.
Americana, incidentally, is registered at the Abu Dhabi Global Market. It had revenues of $2.05 billion and $1.15 billion in 2021 and the first-half of this year, respectively, with 'strong profitability and cash generation'. Net profit attributable to parent last year was $204 million and for the six months ended June 2022 was at $121 million.
"What is especially interesting with Americana's IPO is the decision to list on both ADX and the Saudi Exchange – making it the first company to do so," said Schutzmann. "This not only improves the chances for the company to increase its access to capital by reaching a broader set of investors, but should also work to further raise the publicity and profile around the brand.
"Thanks to a larger pool of investors, the dual listing should also increase the liquidity of the stock, making it easier to trade in the aftermarket."
The Americana IPO is expected to raise around SR6.4 billion to SR6.8 billion based on a price range of SR2.55-SR 2.68 per share...
The Americana IPO is expected to raise around SR6.4 billion to SR6.8 billion based on a price range of SR2.55-SR 2.68 per share. This will make it the biggest IPO on Saudi Exchange this year.
There were two additional retail companies listed on the Saudi Exchange this year - Amwaj International and Jahez International. Shares of both are down more than 15% since listing.
- Junaid Ansari, Senior Vice-President of Investment Strategy and Research at Kamco Invest