Americana, the largest quick service restaurant operator in the Mena region, may raise as much as $1.8 billion from an initial public offering after the company announced an indicative price range on Monday.
The price range was set at Dh2.50 (2.55 Saudi riyals) to Dh2.62 (2.68 Saudi riyals) per share, implying an equity value for the group of $5.73bn to $6.01bn, Americana said.
The final offer price is expected to be announced on November 23, it said.
Americana, which operates restaurant chains such as Pizza Hut and KFC in the Middle East, is latest among regional companies seeking to raise funds through equity markets amid the IPO boom.
The company, which plans to sell 2.52 billion existing ordinary shares, said the public offering was expected to run from November 14 until November 21 for retail investors in the UAE and Saudi Arabia. For institutional investors, it will close on November 22.
The final offering prices will be determined after the book-building process. Americana's shares are expected to start trading on the Tadawul stock exchange and the Abu Dhabi Securities Exchange, the two biggest bourses in the Arab world, “on or around December 6”, the company said.
While capital markets in the US and Europe have slumped amid inflation woes and fears of a looming recession, equity markets in the GCC and broader Mena region have had a flurry of listings.
In October, Saudi-based Power and Water Utility Company for Jubail and Yanbu, better known as Marafiq, said it was pushing ahead with plans to list its shares on the Tadawul.
Borouge, the joint venture between Adnoc and Austrian chemicals producer Borealis, raised $2bn in Abu Dhabi’s biggest listing.
Mena companies have raised about $1.5bn in the third quarter of 2022 alone through seven IPOs.
Saudi Arabia and the UAE, the two biggest Arab economies, have led the regional market activity, according to a report by global consultancy EY.
The number of companies listed on the region's bourses this year has more than tripled to 31. They raised a total of $14.7bn collectively, an increase of 550 per cent from the same period in 2021, EY said.
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 onwards, 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, “with the intention to further distribute any cash not specifically reserved for general corporate purposes, growth investment or mergers and acquisition activity”, it said.
Americana — the largest out-of-home dining operator in 12 countries across Mena and Kazakhstan — recorded a net profit attributable to the parent company of $121 million for the six months to the end of June.
Revenue for the first six months of this year stood at $1.15bn, while its full-year 2021 revenue was $2.1bn.
The company's full-year 2021 profit was $204m.