Lulu Retail Holdings (Lulu), together with its subsidiaries, today announced the price range for the sale of its shares and the start of the subscription period for its initial public offering (IPO) on the Abu Dhabi Securities Exchange (ADX).

 

Lulu is the largest and fastest growing pan-GCC full-line retailer and a public company limited by shares incorporated in the Abu Dhabi Global Market (ADGM).

 

The subscription period starts today and is expected to close on Tuesday, November 5 for the UAE Retail Offering, Eligible Senior Executives, and for Professional Investors. 

 

The offer pice range has been set between AED1.94 and AED2.04 per share. Assuming all the shares offered are sold, the size of the offering will be between AED5.01 billion ($1.36 billion) and AED5.27 billion ($1.43 billion), Lulu said.

 

Based on the offer price range, Lulu Retail is set to list with a market capitalisation of between AED20.04 billion ($5.46 billion) and AED21.07 billion ($5.74 billion), it said.

 

HIGHILIGHTS OF THE OFFERING

• A total of 2,582,226,338 ordinary shares, representing 25% of the total issued shares in the company are to be sold by the company’s sole shareholder, Lulu International Holdings Limited (the selling shareholder). 

• The final offer price will be determined through a book building process and is expected to be announced on Wednesday, November 6.

• The company is targeting a total dividend pay-out ratio of 75% of annual distributable profits after tax, paid semi-annually, subject to its Dividend policy. The Company targets that a dividend for the six months ended December 31, 2024 will be paid in the first half of 2025.

• Admission of the shares to trading on ADX is expected to take place on November 14.

 

Saifee Rupawala, Chief Executive Officer of Lulu Retail, said: “Today marks another significant milestone as we open subscriptions for the Lulu Retail IPO. Our offering presents a unique opportunity for local and international investors to participate in the growth of the largest panGCC retailer by market share and the fastest-growing player of scale in the Kingdom of Saudi Arabia. More than 600,000 people shop with Lulu every day across our multiple store formats, which cater for all shopping experiences and bring the world to the GCC through our diverse and extensive product range. 

 

"We expect continued strong macroeconomic growth across our six markets driven by favourable demographic and consumption trends, and we continue to invest in our business to drive growth and loyalty across our existing 240-store network while also opening new stores, enhancing our operational efficiencies, growing our private label range and our online and ecommerce business. We remain confident we will achieve our guidance targets in 2024 and beyond. The offer price range reflects our desire to prioritise a supportive aftermarket performance post-listing and to welcome all investors to join in Lulu Retail’s exciting next chapter.”

 

CORNERSTONE INVESTORS

On 28 October 2024, the company and the selling shareholder entered into cornerstone investor agreements with (i) Abu Dhabi Pension Fund (ADPF), (ii) Bahrain Mumtalakat Holding Company, (iii) Emirates International Investment Company (EIIC) and (iv) Oman Investment Authority (OIA), pursuant to which each of the cornerstone investors severally (and neither jointly nor jointly and severally) has committed to purchase sale shares in the Qualified Investor Offering at the offer 

price. The aggregate commitments of all the Cornerstone Investors pursuant to the Cornerstone Investor Agreements are approximately AED753 million ($205 million), of which EIIC has committed to subscribe to $100 million, with the Cornerstone Investors’ Shares being subject to a 180-day lock-up arrangement, following listing.

 

Founded in 1974, the Lulu Retail, together with its subsidiaries, is the largest pan-GCC full-line retailer by selling space, sales and number of stores, operating more than 240 hypermarket, express and mini-market stores across the six GCC countries. The group also operates a growing e-commerce presence through its mobile app, webstore and partner channels.  - TradeArabia News Service