Delivery Hero Eyes About $1.5 Billion From Talabat IPO

(Bloomberg) — Delivery Hero SE is seeking to raise as much as $1.5 billion from the initial public offering of its Middle Eastern unit in a deal that will rank as one of the region’s biggest of the year.

Most Read from Bloomberg

The German food delivery firm will offer a 15% stake in Talabat, or 3.49 billion shares, at 1.50 dirhams ($0.41) to 1.60 dirhams apiece, according to a statement Monday that confirmed a Bloomberg News report. The shares are expected to start trading on the Dubai Financial Market on Dec. 10.

The top end of the range implies a valuation of $10 billion for Talabat. Delivery Hero shares were trading down 3.7% Monday evening in Germany, implying a market capitalization of about $11 billion.

The deal comes amid a flurry of listings in the Middle East, where firms have raised about $10 billion from new share sales in 2024. Still, some recent large deals have had lackluster debuts.

Hypermarket chain Lulu Retail raised $1.7 billion in an Abu Dhabi offering last month soon after a $2 billion IPO from a unit of Oman’s state energy company. Both firms had muted debuts, with the Omani firm closing 8% below its offer price.

Still, Talabat’s margins and higher growth prospects support a valuation premium, according to Bloomberg Intelligence’s Tatiana Lisitsina, who called it the “crown jewel” of the Delivery Hero portfolio in a report last month.

The firm plans to pay at least $100 million in dividends in April relative to fourth quarter financial results, plus $400 million in two installments in October 2025 and April 2026. After that, dividends are expected to be paid twice each calendar year, with Talabat targeting a net income payout of 90%.

Get the Mideast Money newsletter, a weekly look at the intersection of wealth and power in the region.

Talabat operates across eight countries – United Arab Emirates, Kuwait, Oman, Qatar, Egypt, Jordan, Iraq and Bahrain. It has cemented its position in the region helped by Delivery Hero’s acquisition of Indian firm Zomato’s food delivery business in the UAE in 2019 and online grocery platform InstaShop in 2020.

The deal comes days after Swiggy Ltd.’s $1.3 billion share sale in India, which valued the company at just over $12 billion. The food-delivery firm’s shares closed 17% higher on debut.

Emirates NBD Capital PSC, JPMorgan Securities and Morgan Stanley have been appointed as joint global coordinators and joint bookrunners on the offering. Abu Dhabi Commercial Bank, Barclays, EFG-Hermes, First Abu Dhabi Bank, Goldman Sachs, ING Bank and UniCredit are joint bookrunners.