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UAE retail giant Lulu Group International will sell 25% of its stake in its retail arm and associated sourcing businesses, raising between $1.7 billion to $1.8 billion, implying a valuation between $6.5 billion to $7 billion, sources with direct knowledge of the matter confirmed with Zawya.
Lulu Group is expected to announce plans to proceed with an IPO on the Abu Dhabi Securities Market (ADX) by early next week.
The pricing will be announced by end of October and a percentage of the shares will be allocated to employees. The shares are expected to start trading on the ADX by mid-November.
A LuLu spokesperson declined to comment, when contacted by Zawya.
A dual listing on the Saudi Exchange (Tadawul), which had been reported earlier, will not go ahead for now, but discussions remain ongoing for a possible listing in future, sources told Zawya.
Banks tapped for the IPO include Emirates NBD Capital, HSBC Holdings, Abu Dhabi Commercial Bank and Citigroup. Moelis & Co. has been retained as Financial Advisors.
The LuLu Group, which operates 260 LuLu stores and 24 shopping malls across the GCC, Egypt, India, and the Far East, was founded by Yusuff Ali in the 90s and is headquartered in Abu Dhabi.
ADQ bought a 20% stake worth just over $1 billion in the group in 2020, paving the way for an investment supporting the group’s expansion in Egypt.
Lulu Group is also into shopping mall development, manufacturing and trading of goods, hospitality assets, and real estate.
In August 2023, it was reported LuLu was raising 10 billion UAE dirhams to refinance debt ahead of a potential IPO, with the company saying the move would further extend its footprint with 80 new hypermarkets across the GCC, Egypt and beyond, while enhancing supply chain networks and e-commerce capabilities.
The LuLu Group reported an annual turnover of about $8 billion in 2022, according to its website.
This will potentially be the fourth IPO in Abu Dhabi this year, following NMDC Energy, which raised $877 million, Alef Education Holding Plc. which raised $515 million, and ADNH Catering, which is set to list its shares on ADX on 23 October.
For the UAE, this is the next big retail IPO following Spinneys, the operator of premium grocery retail supermarkets in the UAE and Oman, which raised AED 1.38 billion ($375 million) through its IPO on the Dubai Financial Market (DFM) in April.
(Writing by Bindu Rai, editing by Seban Scaria)
