Lulu Retail Holdings PLC today announced the price range for the sale of its shares and the start of the subscription period for its initial public offering (IPO) on the Abu Dhabi Securities Exchange (ADX).
The subscription period starts today and is likely to close on Tuesday, November 5, 2024 for the UAE retail offering, eligible senior executives, and for professional investors.
Price range
The offer price range is between AED1.94 and AED2.04 per share. Therefore, assuming all the shares offered are sold, the size of the offering will be between AED5.01 billion ($1.36 billion) and AED5.27 billion ($1.43 billion).
Based on the offer price range, Lulu Retail will list with a market capitalization of between AED20.04 billion and AED21.07 billion.
The company’s sole shareholder, Lulu International Holdings Limited, will sell a total of 2,582,226,338 ordinary shares, or 25 percent of the total issued shares in the company.
The final offer price is likely to be announced on Wednesday, November 6, 2024.
Dividend policy
The company is targeting a total dividend pay-out ratio of 75 percent of annual distributable profits after tax, paid semi-annually. Moreover, the company plans to pay the dividend for the six months ended December 31, 2024 in the first half of 2025.
Admission of the shares to trading on the ADX is likely to take place on Thursday, November 14, 2024.
“Today marks another significant milestone as we open subscriptions for the Lulu Retail IPO. Our offering presents a unique opportunity for local and international investors to participate in the growth of the largest pan-GCC retailer by market share and the fastest-growing player of scale in the Kingdom of Saudi Arabia. More than 600,000 people shop with Lulu every day across our multiple store formats, which cater for all shopping experiences and bring the world to the GCC through our diverse and extensive product range,” said Saifee Rupawala, CEO of Lulu Retail.
“We expect continued strong macroeconomic growth across our six markets driven by favourable demographic and consumption trends, and we continue to invest in our business to drive growth and loyalty across our existing 240-store network while also opening new stores, enhancing our operational efficiencies, growing our private label range and our online and ecommerce business. We remain confident we will achieve our guidance targets in 2024 and beyond, and the offer price range reflects our desire to prioritize a supportive aftermarket performance post-listing and to welcome all investors to join in Lulu Retail’s exciting next chapter,” he added.
Cornerstone investors
On October 28, 2024, the company and the selling shareholder entered into cornerstone investor agreements with Abu Dhabi Pension Fund (ADPF), Bahrain Mumtalakat Holding Company Co. B.S.C. (Mumtalakat), Emirates International Investment Company LLC (EIIC) and Oman Investment Authority (OIA), pursuant to which each of the cornerstone investors has committed to purchase sale shares in the qualified investor offering at the offer price. The aggregate commitments of all the cornerstone investors are approximately AED753 million ($205 million), of which EIIC has committed to subscribe to $100 million.
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