What will Spinney’s achieve from its IPO on Dubai Stock Exchange?

Spinney’s in the UAE and Oman, giant retail series, is planning to obtain financing worth $375 million through an initial public offering of about 25% of its shares, per Reuters.

The indicative price per share ranges from 1.42 UAE dirhams to 1.53 UAE dirhams, which may result in financing that may reach 5.11 billion UAE dirhams, or a range between 1.39 billion dollars and 1.50 billion dollars, according to the data issued by the company in this regard.

900 million shares of the giant company will be offered for IPO on the Dubai Stock Exchange for 0.01 UAE dirham per share, which is equivalent to 25% of its shares traded in the markets.

The retail company operates in the UAE and Oman under the brands “Spinney’s and Waitrose,” and also plans to open branches in Saudi Arabia this year, as it believes there is great potential for expansion and growth there, amid reports indicating the company’s intention to focus its activity in the cities of Jeddah and Riyadh.

Growth, Expansion

George Khoury, International Director of the Education and Research Group at CFI Financial Group, said: “This initial offering may provide the opportunity for the company to achieve further growth and expansion in its business, in addition to the possibility of making progress in terms of the brand it represents.” “This makes it more feasible for potential investors and customers as it seeks to enter the Saudi market”, he added.

He noted, during an interview with Business Recorder, that “the company’s listing on the Dubai Stock Exchange and its growth may have a positive impact and may help the success of the initial offering.”

The company succeeded in attracting two cornerstones of the investment world in the UAE to buy its shares. They are UAE International Investment and Franklin Templeton Company. The two companies announced their commitment to purchase shares owned by Spinney’s worth $75 million.

Sunil Kumar, CEO of Spinney’s, said: “We received a positive reaction from all investors at the international and regional levels,” stressing that “since announcing the company’s intention to sell a portion of its shares, we are witnessing more momentum in the level of buying demand, which is pushing many investors strongly towards participation in the IPO.

Spinney’s operates about 75 supermarkets that sell groceries in the Emirates and Oman under the brands “Spinney’s, Waitrose and Al Fajr,” and it also plans to open new branches this year, targeting the Saudi market. Kumar stressed that despite the floods that swept the Emirates last week, there was a limited impact of this climate phenomenon on the operation of these branches.

Saudi Market Outlook:

The company’s CEO confirmed that there are “a lot of Saudi investors who are excited about the initial offering, as they believe that it may be a good opportunity for the Saudi market to obtain this base of customers who obtain food and beverages. Therefore, Saudi investors are very keen to invest in this company.

The initial offering of Spinney’s shares will continue until April 30, at which time the final price of the share will be determined, according to the company, which expects in its statement regarding this offering that trading in the company’s shares will begin on May 9.

Price Stabilization

Spinney’s’ statement on the IPO said: “The Company and the selling shareholder have appointed a stabilization manager who may, within the limits of applicable law, regulations and rules, carry out stabilization operations on 45,000,000 shares (“Stabilization Shares”), with the aim of supporting the market price of the Stabilization Shares at a higher level than would prevail in the open market. The Selling Shareholder reserves the right to increase the number of Stabilization Shares, up to a maximum of 10% of the Selling Shares, at any time before the end of the subscription period at its sole discretion, and in accordance with applicable laws.”

The statement explained that what the company is undertaking is a public offering to individual investors and other investors in the United Arab Emirates, and an offering to professional investors as well as other investors in a number of countries, including the UAE, outside the United States of America, based on Regulation ‘S’, in accordance with the US Securities Law. The American Code of 1933, as amended.

The subscription period began on April 23 and will end on April 29 for UAE retail investors, but this period is scheduled to extend to April 30 for professional investors.

Spinneys experienced impressive growth in 2023, with revenues reaching 2.87 billion dirhams, reflecting an 8.2% increase since 2019.