Germany's Delivery Hero could launch the up to US$1.5bn Dubai IPO of its on-demand food app subsidiary Talabat in the coming days with a trading update on Thursday potentially serving as catalyst for pre-marketing to begin and pointing to a launch early next week.

Bankers on and away from the deal have reported considerable interest in the offer and strong engagement while a banker involved said early look work had been going well and the launch is now imminent.

“It’s a fantastic story, a very unique asset with high cashflow and ticks all the boxes,” the banker said. “It’s a name that resonates well and is picking up demand across local, regional and international accounts.”

A second banker involved said it is shaping up to be one of the standout deals of the year from the region based on global feedback.

Valuation is broadly expected at US$13bn–$15bn-equivalent with a deal size of around 10%, though Delivery Hero’s need to deleverage could mean it sells more stock.

Saudi Arabia’s Jahez has been cited as a peer with such a valuation placing Talabat at a premium, according to analysis by Jefferies, as well as making it larger than parent Delivery Hero, which has an €11.2bn market capitalisation.

The deal is another large step in the diversification of UAE floats as a private sector issuer and representing a move towards more growth-focused valuation metrics.

“It’s grown very quickly and people want to break away from the focus on dividend yield to look at P/E so this is a chance to see how investors respond,” said a banker away from the deal. “There are a lot of ways to play yield and far fewer to play growth. It’s also tech so a way to play that as well.”

Emirates NBD, JP Morgan and Morgan Stanley are running the deal.

Source: IFR