Spinneys, the operator of premium supermarkets in the UAE and Oman, plans to list its shares through an initial public offering (IPO) on the Dubai Financial Market to capitalise on "enormous opportunities" for expanding its UAE presence and venturing into Saudi Arabia.

Spinneys intends to sell 900 million shares, representing 25 per cent of the company's issued share capital, through the IPO, announced on Tuesday.

All shares offered in the public float are held by Al Seer Group as the selling shareholder, with the option to adjust the offering size.

The IPO will be open for subscription to UAE investors as part of the retail tranche and to institutional investors as part of the qualified investors’ offering.

Subscription Period

The subscription period for retail investors will run from April 23 to April 29, while for professional investors, it will conclude on April 30.

"This is the opportune time to invite investors to join us in our future growth," remarked Sunil Kumar, Spinneys' chief executive.

"This listing will provide us with strategic flexibility for our ambitious plans moving forward, attract a diverse shareholder base, and grant us access to the capital market to achieve our growth objectives."

Kumar highlighted the significant growth opportunities in the UAE and Saudi Arabia, driven by macroeconomic expansion in the region.

The final offer price for the IPO will be determined through a book-building process, with Spinneys shares anticipated to commence trading on the DFM in May.

Spinneys anticipates strong demand from regional and international investors, buoyed by discussions outlining the company's growth plans and expected dividend payouts.

Investor confidence in the UAE and wider GCC stock markets, robust macroeconomic growth, and recent strong performances of regional listings also support Spinneys' outlook.

Spinneys currently holds a 27 per cent market share in Dubai and 12 per cent in the UAE's Dh23 billion target market for 2022, driven by growth in online sales, private label brands, and fresh food offerings.

Spinneys’ IPO announcement aligns with increased economic activity in Dubai, with companies raising Dh34.5 billion ($9.4 billion) through share sales over the past three years.

In November 2021, Dubai announced plans to list 10 state-owned companies and establish a Dh2 billion market maker fund to foster listings from private companies.

Expansion Plans

Spinneys plans to expand into Saudi Arabia this year, opening its first shop in the kingdom by mid-year and three more by year-end, aiming for two to four new stores annually over the next five years.

In the UAE, Spinneys will launch "Kitchen by Spinneys" offering ethnic food options, with the first concept store set to open in Dubai Mall in the first half of this year.

Spinneys anticipates funding its expansion plans through cash flow, with the IPO providing additional access to capital for potential future mergers and acquisitions, though no immediate deals are planned.

The company operates 75 outlets across 1.3 million square feet of gross leasable area, with revenue expanding to Dh2.87 billion last year, driven by increased online penetration and store footprint expansion in the UAE.

Rothschild & Co Middle East serves as the independent financial adviser, with Emirates NBD Capital, Merrill Lynch, and HSBC Bank Middle East acting as joint global coordinators and bookrunners.

(The writer is a legal associate at NYK Law Firm, one of the top legal consultants in Dubai)

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