Two sources said that the offering process planned by the German company for the fourth quarter may begin next Monday, during which the largest food ordering company in the Middle East may witness the sale of shares worth more than one billion dollars.
The initial public offering comes amid a boom in spending witnessed by the retail sector in the Gulf region, and amid a wave of IPOs in the region as governments seek to reduce their economies’ dependence on oil.
Lulu Retail Holding Company raised $1.72 billion on Wednesday in its initial public offering.
And it was founded Talabat Company In Kuwait in 2004, it has since expanded to serve customers in the Emirates, the Sultanate of Oman, Qatar, Bahrain, Jordan, Iraq and Egypt, and has more than six million active customers as of the end of July, according to company data.
In addition to meals, they provide delivery of groceries and other goods such as health and beauty products.
Germany’s Delivery Hero bought a majority stake in Talabat in 2015. The Berlin-based online food delivery company said in August that it intends to retain a majority stake. Analysts indicated that the public offering may help reduce its debt.
The company’s shares, listed on the Frankfurt Stock Exchange, fell by more than 74 percent from their highest levels in January 2021, which they reached thanks to increased demand during the Covid-19 pandemic.
Giles Thorne, an analyst at Jefferies, said earlier this week that the IPO “represents a very positive catalyst for Delivery Hero shares,” attributing this to “very low execution risks” and a significant reduction in debt on the balance sheet.
He added that Talabat is “one of the best, if not the best, delivery platforms in the world,” estimating the company’s value at between 11.5 billion and 13.5 billion euros.
Regional competitors include Saudi Arabia’s Jahez and Careem, owned by Uber Technologies.
Niklas Ostberg, CEO of Delivery Hero, did not comment when asked about the matter in an interview with Reuters yesterday, Thursday, when the company announced third-quarter profits.
The company’s gross merchandise value, which measures the total value of goods sold, rose by 30 percent in the Middle East and North Africa region, the company’s fastest-growing region where it also operates through other units.
The region represented more than a quarter of the company’s total merchandise value during the third quarter.
