(Bloomberg) — Delivery Hero SE unveiled plans to list its Talabat unit in Dubai in what could be among the region’s biggest initial public offerings of the year.
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The German food delivery firm plans to sell a 15% stake in its Middle Eastern subsidiary, according to a statement on Sunday, retaining a majority interest. It could amend the size of the offering subject to approvals from the United Arab Emirates’ Securities and Commodities Authority.
The deal could raise about $1 billion, Bloomberg News reported in September. The IPO could value Delivery Hero’s “crown jewel” at as much as $12 billion including debt, according to a report from Bloomberg Intelligence.
Investors can submit orders from Nov. 19 to Nov. 27, and shares are expected to start trading in Dubai on or around Dec. 10.
Talabat currently plans to pay a minimum dividend of about $100 million in April relative to fourth quarter financial results, plus $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%.
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The IPO comes amid a flurry of new share sales in the Middle East. Oman’s state-owned energy company raised a record $2 billion by listing its exploration and production unit last month, and is preparing to sell shares in its methanol business.
Private sector companies are also rushing in. Lulu Retail Holdings Plc raised $1.72 billion in the UAE’s biggest listing of the year. IT services firm Alpha Data is eyeing an Abu Dhabi listing, while online cosmetics retailer Nice One, health care provider Almoosa Health, and tech firm Ejada are lining up IPOs in Saudi Arabia.
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Talabat reported $6 billion in gross merchandise volumes in 2023, up from just under $4 billion in 2021. Free cash flow increased by 64% year-on-year to $226 million in the six months ended June.
Still, the entry of competitors could dent Talabat’s market share and valuation, according to Bloomberg Intelligence analyst Tatiana Lisitsina. She cited the example of Saudi Arabian firm Jahez, whose profit outlook was hit by the entry of Chinese food delivery giant Meituan. While Talabat doesn’t operate in the kingdom, lucrative Gulf markets could attract competitors, Lisitsina said.
