Delivery Hero is preparing an initial public offering (IPO) of its Emirati subsidiary Talabat on the Dubai stock exchange in the fourth quarter of this year, the German food delivery company said on Thursday.
Under the planned listing on the Dubai Financial Market, the parent would sell existing shares in Talabat while retaining a majority stake, it added.
Delivery Hero‘s shares opened 7% higher, but pared gains to trade up 1% at 0724 GMT.
“We see news of the IPO of Talabat as being the main driver of a positive response,” Jefferies analysts said in a note.
If the IPO is successful, it would help to improve Delivery Hero‘s balance sheet after the sale of its Asian subsidiary foodpanda, they said, adding it would also shine a light on a quality asset that is now somewhat lost in the German firm’s corporate structure.
Delivery Hero‘s sales in the Middle East and North Africa (MENA) region jumped 31% in the second quarter, growing faster than other regions, according to a statement that came shortly after the IPO announcement.
Last year, Talabat‘s gross merchandise value (GMV), a metric for delivery firms measuring the total value of all goods sold, hit 5 billion euros ($5.6 billion).
Talabat serves customers across the Middle East region in countries such as Bahrain, Egypt, Iraq, Jordan, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates.
Reuters