Americana, the largest quick-service restaurant operator in the Mena region, has raised $1.8 billion from its initial public offering, which will result in the company listing on the Arab world's two largest stock markets.
The company sold more than 2.52 billion shares, or 30 per cent stake of its issued share capital, with the IPO drawing strong demand from institutional and retail investors that generated $105 billion of orders. It was approximately 58 times oversubscribed, the company said in a statement on Thursday.
The price range was set at the higher end of Dh2.62 in the UAE and 2.68 Saudi riyals ($0.71) a share, implying an equity value for the group of $6.01 billion.
Last week, the company doubled the size of its UAE retail tranche in its IPO to 10 per cent due to strong demand.
The retail segment of its offering in Saudi Arabia was also 10 per cent of the total offering. The institutional investors tranche was reduced to 80 per cent, from 85 per cent of the total offering.
Americana will be dually listed on Saudi Arabia's Tadawul bourse and the UAE's Abu Dhabi Securities Exchange.
Shares are expected to start trading on or around December 6.
Americana is Saudi Arabia's largest IPO this year and the first company to be dually listed in the kingdom and the UAE.
Americana, founded in Kuwait in 1964, introduced fast-food restaurants in the region in 1970. The company is the latest among regional companies seeking to raise funds through equity markets amid higher oil prices, greater liquidity and strong investor confidence.
It is the largest out-of-home dining operator in 12 countries across the Mena region and Kazakhstan and operates restaurant chains such as Pizza Hut and KFC.
Unlike global markets that have had subdued investor sentiment amid soaring inflation and rising recession fears, the Mena region has had strong IPO activity in 2021 and this year.
The region had 24 IPOs in the first half of this year. The UAE was the biggest IPO market in terms of the aggregate value of deals while Saudi Arabia led in terms of volume with five IPO deals in the first six months of the year, according to EY data.
Middle East IPOs have raised $18 billion this year, the highest share for the Gulf region after 2019, when Saudi Aramco went public in a $29 billion offering, the world’s largest, according to Bloomberg data.
Saudi Arabia's main Tadawul exchange had two IPOs and the Nomu-Parallel Market drew three, which raised $490 million in proceeds in the third quarter.
Americana intends to maintain a “robust dividend policy” and make a partial dividend distribution of about 75 per cent of its net profit attributable to the parent company for the second half of this year.
It expects to pay the dividend in cash during the first half of next year.
From 2023, the company intends to adopt an annual dividend distribution policy and plans to distribute a minimum of 50 per cent of its profit in dividends.
Rothschild & Co acted as independent financial adviser on the IPO while First Abu Dhabi Bank, Goldman Sachs, Morgan Stanley and SNB Capital were joint global co-ordinators and financial advisers.
FAB was the lead manager and listing adviser in the UAE while SNB Capital was lead manager in Saudi Arabia.