Delivery Hero Middle East Unit Prepares for IPO of the Year in the Emirates

Talabat Holding, one of the largest food delivery companies in the Middle East, is set to raise about $2 billion in the United Arab Emirates' largest initial public offering (IPO) this year after its parent, Germany-based Delivery Hero SE, priced the offering at the high end of its range on Friday, Reuters reported.

Talabat said the IPO price is 1.60 dirhams ($0.4357) per share, which means gross proceeds of about $2 billion from the offering, giving the company a market capitalization of about $10.1 billion.

Delivery Hero decided on Wednesday to increase its stake in the offering to 20% from 15%, citing strong demand from international and regional investors. Emirates NBD Capital PSC, JPMorgan Securities and Morgan Stanley are the global managers of the offering. Abu Dhabi Commercial Bank, Barclays, EFG-Hermes, First Abu Dhabi Bank, Goldman Sachs, ING Bank and UniCredit are bookrunners in the deal.

"Delivery Hero intends to retain a long-term indirect majority position in Talabat," the parent company said.

Dubai-based Talabat said the offering was oversubscribed, with CEO Tomaso Rodriguez saying: "We are confident that our growth strategy focused on enhancing our product offering and expanding our market penetration will fuel the next phase of Talabat's success."

The IPO comes amid a wave of listings in the Middle East, where companies have raised about $10 billion in new share sales by 2024. However, some recent large deals have had weak debuts. Hypermarket chain Lulu Retail raised $1.7 billion in an Abu Dhabi offering last month, shortly after a $2 billion IPO by a unit of Oman's state-owned energy company.

Talabat shares are expected to start trading on December 10.

Founded in 2004 in Kuwait, Talabat operates in eight countries - the United Arab Emirates, Kuwait, Oman, Qatar, Egypt, Jordan, Iraq and Bahrain. The company has strengthened its position in the region, helped by Delivery Hero's acquisition of Indian company Zomato's food delivery business in the UAE in 2019 and online grocery platform InstaShop in 2020. The company had more than six million active customers as of September.

Delivery Hero first entered the Middle East in 2015, when it bought Talabat from German e-commerce group Rocket Internet, which had acquired it for about 150 million euros ($158.52 million) earlier that year.