Restaurant group could raise up to $1.8 billion from offer

Americana, the Mena region’s largest fast-food operator, could raise up to $1.8 billion in an initial public offering after the company announced an indicative price range on Monday.

The price range was set between 2.50 Dh (2.55 Saudi riyals) and 2.62 Dh (2.68 Saudi riyals) per share, implying an equity value for the group of 5.73 billion dollars to $6.01 billion, Americana said.

The final offer price is expected to be announced on Nov. 23, he said.

Americana, which operates restaurant chains such as Pizza Hut and KFC in the Middle East, is the latest among regional companies seeking to raise cash on stock markets amid the IPO boom.

The company, which plans to sell 2.52 billion existing ordinary shares, said the public offering was scheduled to run from November 14-21 for retail investors in the United Arab Emirates and Saudi Arabia. For institutional investors, it will close on November 22.

Final offer prices will be determined after the order book building process. Americana’s shares are expected to begin trading on the Tadawul Stock Exchange and the Abu Dhabi Stock Exchange, the two largest stock exchanges in the Arab world, “on or around December 6”, the company said.

As capital markets in the United States and Europe slumped on inflation concerns and fears of an impending recession, stock markets in the GCC and the wider Mena region saw a wave of declines. registrations.

In October, Saudi-based Power and Water Utility Company for Jubail and Yanbu, better known as Marafiq, said it was proceeding with plans to list its shares on Tadawul.

Borouge, the joint venture between Adnoc and Austrian chemicals producer Borealis, raised $2 billion in Abu Dhabi’s biggest listing.

Mena companies raised around $1.5 billion in the third quarter of 2022 alone through seven IPOs.

Saudi Arabia and the United Arab Emirates, the two largest Arab economies, led regional market activity, according to a report by global consultancy EY.

The number of companies listed on stock exchanges in the region this year more than tripled to 31. They raised a total of $14.7 billion collectively, a 550% increase from the same period in 2021 , said EY.

Americana intends to maintain a “robust dividend policy” and distribute a partial dividend of approximately 75% of its net income attributable to the parent company for the second half of this year.

It expects to pay the dividend in cash in the first half of next year.

From 2023, the company intends to adopt an annual dividend distribution policy and plans to distribute at least 50% of its profits as dividends, “with the intention of further distributing any cash not specifically earmarked for general corporate purposes, growth investing or mergers and acquisitions activities,” he said.

Americana – the largest out-of-home restaurant operator in 12 Mena countries and Kazakhstan – posted net income attributable to parent company of $121 million for the six months to the end of June.

Revenue for the first six months of this year was $1.15 billion, while its revenue for the year 2021 was $2.1 billion.

The company’s profit for the year 2021 was $204 million.

Updated: November 14, 2022, 07:27