Retail behemoth Lulu of the United Arab Emirates is expected to raise between 5.01 billion and 5.27 billion UAE dirhams (USD 1.36 billion to USD 1.43 billion) through its initial public offering (IPO) on the Abu Dhabi Securities Exchange (ADX).
Around AED 20.04 billion to AED 21.07 billion is the estimated market capitalisation of the company, which has set the offer price range between AED 1.94 and AED 2.04 per share.
For UAE retail investors, qualified senior executives, and professional investors, the subscription period has begun and is anticipated to end on November 5, 2024. The following day (November 6, 2024), the final offer price will likely be revealed after a book-building process.
In addition, Lulu announced on October 28th that it had signed cornerstone investor agreements with the state-backed Abu Dhabi Pension Fund, the Oman Investment Authority, Bahrain’s sovereign wealth fund Mumtalakat, and Abu Dhabi’s Emirates International Investment Company (EIIC) under the qualified investor offering at the offer price.
About AED 753 million has been committed by all of the Cornerstone Investors combined, with EIIC pledging to subscribe USD 100 million. The shares will be subject to a 180-day lock-up period after listing.
In a three-tier initial public offering (IPO), Lulu said that it would list 2.58 billion shares, or 25% of the company’s total share capital. A total dividend payout ratio of 75% of yearly distributable profits after taxes is the company’s goal, and it will be paid out semi-annually following its dividend policy.
In the first half of 2025, a dividend will be paid for the six months that concluded on December 31, 2024. The expected date of listing the shares on the ADX is 14 November. Emirates NBD Capital, HSBC Holdings, Abu Dhabi Commercial Bank and Citigroup are joint bookrunners, with Moelis & Co. retained as Financial Advisors.
Joint lead managers include First Abu Dhabi Bank, HSBC Bank Middle East, Emirates NBD Capital, Abu Dhabi Commercial Bank, and EFG Hermes. The joint lead receiving banks are FAB and ADCB, with the latter continuing to serve as a listing advisor.
Lulu, as of October 2024, has an extensive supermarket chain network in over 23 countries, including the Middle East, Asia, and Europe. The group operates over 260 stores in Middle Eastern countries, employs over 65,000 people, and achieves annual revenue exceeding USD 8 billion.
Meanwhile, Vietnam Prime Minister Pham Minh Chinh met with MA Yusuff Ali, chairman of Lulu Group, during an official visit to the UAE on October 27. During the meeting, Yusuff Ali expressed interest in expanding into the Vietnamese market, seeking support from the government and relevant ministries, while describing the Southeast Asian country as, “A wonderful country with impressive economic achievements.”
Yusuff Ali also praised the high quality of Vietnamese exports, stating that Lulu has established a representative office in Ho Chi Minh City to source Vietnamese goods for its supermarket system. The group also plans to collaborate with the Vietnamese Embassy to organise a day to promote Vietnamese agricultural products in the UAE and the wider Middle East market.
PM Chinh, during the meeting, urged Lulu Group to further promote Vietnamese products with potential that align with consumer preferences across the chain’s global supermarket system. He also suggested Lulu Group facilitate Vietnamese businesses’ participation in the Halal industry supply chain and consider investing and cooperating with potential Vietnamese partners in agricultural processing and establishing a supermarket chain in Vietnam, highlighting the country’s population of over 100 million with strong purchasing power.
PM Chinh proposed that the group coordinate with agencies to organise quarterly Vietnamese agricultural and goods promotion events in the Middle East.