Shares of Americana, the largest quick-service restaurant operator in the Mena region, surged above their listing price as the company made its debut on the Arab word's two biggest stock markets on Monday.
The company's shares, which started trading under the ticker symbol “AMR” on the Abu Dhabi Securities Exchange, jumped about 12.6 per cent to Dh2.95 ($0.80) in early trading. The company's shares, trading under the symbol "AMERICANA" on the Saudi Tadawul market, climbed as much as 6.7 per cent to 2.86 riyals ($0.76).
The final offer price was set at the higher end of Dh2.62 in the UAE and 2.68 Saudi riyals a share.
Shares of the company settled 7.6 per cent higher on the ADX to Dh2.82 at the closing of trading in Abu Dhabi, giving the company a market value of about $6.5 billion.
In Saudi Arabia, the share price of the company finished the day up 2.24 per cent to 2.74 riyals.
Saudi Arabia's sovereign wealth fund, the Public Investment Fund, and Mohamed Alabbar, founder and managing director of Emaar Properties in Dubai, sold more than 2.52 billion shares, or a 30 per cent stake of the company's issued share capital, with the IPO drawing strong demand from institutional and retail investors generating $105 billion of orders.
It was about 58 times oversubscribed, the company said in an earlier announcement.
Americana raised $1.8 billion from its initial public offering, which will result in the company listing on Saudi Arabia's main Tadawul market and the ADX, the Arab world's two largest stock markets.
Americana is Saudi Arabia's largest IPO this year and the first company to be dually listed in the kingdom and the UAE.
"The successful conclusion of our IPO is the culmination of Americana Restaurants’ transformational journey, as well as a remarkable milestone for the growth and depth of the region’s financial markets," said Mr Alabbar.
The extraordinary demand we drew from a geographically diverse investor base clearly demonstrates our new shareholders’ confidence in our business, our extraordinary team, and our ability to deliver attractive long-term returns."
We welcome our new shareholders and look to the next chapter of growth. Americana Restaurants will continue to provide investors exposure to a unique value proposition in a large and relatively underpenetrated sector, with significant potential for further expansion.”
Americana, founded in Kuwait in 1964, introduced fast-food restaurants in the region in 1970. It was previously traded on the Kuwait Stock Exchange but delisted its shares in 2017. 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.
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.
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 listings 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 more than $19 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.
“The dual listing of Americana Restaurants on ADX and Saudi Exchange ... is a prime example of how Abu Dhabi continues to enhance its status as a premier investment destination and home to both international and institutional capital," said Hisham Khalid Malak, chairman of ADX.
Americana's net profit attributable to the parent company increased threefold to about $204 million last year, from about $81 million in 2020.
Revenue for the first six months of this year stood at $1.15 billion while full-year revenue for 2021 hit $2.1 billion, a growth of 30 per cent from a year earlier.
The company intends to maintain a “robust dividend policy” and make a partial dividend distribution of about 75 per cent of 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.