(Bloomberg) -- Delivery Hero SE is looking to list its Middle Eastern unit, Talabat, on the Dubai stock exchange as it seeks to benefit from a rush of offerings in the Gulf.
The listing is planned for the fourth quarter of 2024, the German food delivery company said in a statement on Thursday. The initial public offering is pending market conditions and regulatory approvals, it said.
“A listing may be pursued through a secondary sale of shares by Delivery Hero which would retain the majority interest in the local listing entity after an IPO,” the firm said. Its shares rose as much as 9% in Frankfurt.
RBC Capital Markets analysts value Delivery Hero’s Middle East and North Africa business at €5 billion ($5.5 billion). That implies a valuation of 1.3 times enterprise value-to-sales, they wrote in a note.
The news comes as Gulf IPOs pick up after a summer lull. Oil services provider NMDC Group on Wednesday announced it’s planning an $877 million IPO for its energy unit, putting it on track to be the United Arab Emirates’ biggest listing of the year. Earlier this week, Saudi Arabia-based perfume maker Al Majed for Oud Co. received more orders for its IPO than shares available in just a few hours after books opened.
While Deutsche Bank AG analysts said the listing could help Delivery Hero’s valuation, and should be received positively, those at Bernstein questioned the timing. Bloomberg Intelligence noted a cash flow risk.
“Delivery Hero’s planned IPO of its Middle Eastern business would restrict access to the cash flow from its most profitable business unit needed to fight off intensified competition in South Korea,” Bloomberg Intelligence analysts Tatiana Lisitsina and Diana Gomes wrote.
--With assistance from Isolde MacDonogh and Jake Rudnitsky.
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