Abu Dhabi: The much anticipated initial public offering (IPO) of the Abu Dhabi-based Lulu group has turned out to be a 100 per cent offer for sale (OFS) with Lulu International Holdings Ltd poised to sell a 25 per cent stake in Lulu Retail Holdings PLC.
Talking to businessbenchmark.news, a source from Abu Dhabi said it’s yet to be known how the proceeds of the issue are going to be used.
Since Lulu International Holdings Ltd (LIHL) is the sole shareholder selling 25 per cent of Lulu Retail Holdings PLC in the IPO, the proceeds from this sale will go to Lulu International Holdings Ltd, not directly to Yusuffali and his family.
In short, Yusuffali and his family could receive 80 per cent of the proceeds from the IPO if Lulu International Holdings Ltd distributes it, but they cannot directly take it unless the holding company decides to do so.
In a statement, Lulu group (Lulu International Holdings Ltd) announced its intention to proceed with an IPO, and to list its shares for trading on the Abu Dhabi Securities Exchange (ADX).
Once the IPO is concluded, Yusuffali’s family will retain an effective 60 per cent stake in Lulu Retail Holdings, as Yusuffali had previously sold a 20 per cent stake in Lulu International Holdings Ltd to the Abu Dhabi Developmental Holding Company (ADQ) in 2021.
Shares on offer
In a press release on Monday, the company said that a total of 2,582,226,338 ordinary shares (2.582 billion shares), each with a nominal value of $0.014 (equivalent to AED0.051), representing 25 per cent of the total issued shares in the company, are to be sold by the company’s sole shareholder, Lulu International Holdings Ltd, where Yusuffali’s family holds 80 per cent stake.
Lulu Retail earned $3.9 billion’s revenue for the 2024 first-half, up 5.6 per cent on the year, while the full-year revenue in 2023 rose 5.6 per cent to $7.3 billion.
“The annual increase in revenue was primarily driven by sales growth from existing stores and further expansion of the group’s store network, as well as growth from its online channel,” an earlier statement had said.
Who can take part in IPO?
The offering will be made available to UAE retail investors, including eligible employees of the Group, as part of the UAE Retail Offering; to Professional Investors as part of the Qualified Investor Offering; and to Eligible Senior Executives of the Group as part of the Senior Executives Offering.
The subscription period will open on Monday, October 28, and end on Tuesday, November 5, for UAE Retail Investors, Professional Investors and Eligible Senior Executives, according to the official release.
The final Offer Price will be determined through a book building process. Admission of the shares to trading on ADX is expected to take place on or around November 14.
Dividend
The company is targeting a total dividend pay-out ratio of 75 per cent of annual distributable profits after tax, paid semi-annually.
The company hopes that the dividend for the six months ended December31, 2024, will be paid in the first half of 2025.
Yusuffali MA, founder, chairman and non-executive director of Lulu Retail, said, “It’s with immense pride that we announce the planned IPO of Lulu Retail on ADX, bringing to market the largest pan-GCC full-line retailer by selling space, sales and number of stores.”
Operations
Lulu operates more than 240 stores across six GCC countries. “We’re looking forward to welcoming new shareholders to Lulu and are sure they will share our passion for the company and excitement for the future,” Yusuffali further said.
Saifee Rupawala, Chief Executive Officer (CEO) of Lulu Retail, said that Lulu is a brand synonymous with retail in the GCC. Over the past 50 years, the group has grown from one store in Abu Dhabi to the largest pan-GCC retailer by market share and the fastest-growing player in the Kingdom of Saudi Arabia.
“With GCC retail presenting a $100 billion market opportunity over the next five years and our business in the Kingdom of Saudi Arabia primed for further growth, we are confident that Lulu will continue to be where the world comes to shop,” the group CEO said.
