Saudi Arabia’s BinDawood grocery retailer to delay retail offer of its IPO

The country's third-largest supermarket retailer plans to sell 20% of its shares in the public offering to retail and institutional investors

Bin Dawood Holding has 73 stores of which 51 are hypermarkets and 22 are supermarkets. Courtesy of BinDawood Holding

Saudi Arabia's grocery retailer BinDawood Holding Company said it is delaying the retail part of its initial public offering (IPO) planned for this month due to disclosure requirements.

The subscription period for retail investors was originally scheduled to begin on September 27 on the Tadawul exchange, the biggest Arab bourse by market capitalisation.

"There has been a development relating to BinDawood Holding, which requires disclosure in a supplementary prospectus to be approved by the Capital Market Authority prior to its publication," the kingdom's third-largest grocery retailer said in a statement on its website on Thursday.

"The supplementary prospectus will contain certain additional information regarding, among others, the institutional book-building and the retail offering period, which will no longer commence on September 27.”

The company and joint financial advisers Goldman Sachs and JP Morgan expect to provide updates next week, BinDawood said.

BinDawood will float 20 per cent of the company through the sale of existing shares. At the top of the 84 to 96 Saudi riyals per share range, the company may raise 2.19 billion riyals ($584 million). The price range values the firm at 9.6bn riyals to 11bn riyals.

Initially, all the offered shares will be provisionally allocated to institutional investors but may be later reduced to 90 per cent, depending on demand by individual investors, the retailer said earlier this month. Proceeds from the IPO will be used to pay off existing shareholders.

The company is forging ahead with plans for a listing, capitalising on a surge in demand for online shopping during the Covid-19 pandemic. The offering comes as the kingdom sees more company listings on the Tadawul this year, including healthcare group Dr Sulaiman Al Habib Medical Services Company and mortgage lender Amlak International for Real Estate Finance.

BinDawood Holding has 73 stores out of which 51 are hypermarkets and 22 are supermarkets. It operates mass, mid-market supermarket chain BinDawood and high-end grocery brand Danube.

Significant shareholders in the company include the BinDawood family and Bahrain-based Investcorp, which acquired a stake in 2015.

In the first half of 2020, BinDawood Holding recorded a 23 per cent increase in net income and 22 per cent rise in revenue compared to the same period last year. The increased profitability was driven by customers stocking up during the pandemic.