Delivery Hero Soars 10% on Plans for Talabat IPO in Dubai

Delivery Hero, the European food delivery giant, saw its shares surge by nearly 10% on Thursday following the announcement of its plan to spin off its Middle Eastern subsidiary, Talabat, and list it on the Dubai Financial Market later this year.

In a brief statement, Delivery Hero confirmed that it is preparing to list Talabat during the fourth quarter of 2024. The company noted that the listing might be pursued through a secondary sale of shares, with Delivery Hero retaining a majority interest in the entity post-IPO.

While the company has not disclosed specific details such as the valuation, share price target, or the exact number of shares to be offered, the news generated significant market interest. Delivery Hero’s stock climbed sharply in response, extending gains amid a broader rise in European equities.

The potential Talabat IPO is subject to several conditions, including favorable market conditions, regulatory approval of the prospectus, and consent from Delivery Hero’s management and supervisory boards.

Speaking to CNBC, Delivery Hero CEO Niklas Ostberg emphasized that the proposed listing is aimed at attracting local investors in the Middle East to co-invest and support Talabat’s growth. He highlighted the importance of the Middle East market to Delivery Hero’s overall business, noting that the region accounted for approximately 28% of the company’s revenue in the second quarter of 2024.

“The Middle East is a very large part of our business, and there is clear value for us to further build a strong base there,” Ostberg stated.

Talabat operates across several countries in the Middle East and North Africa, including Bahrain, Egypt, Iraq, Jordan, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. The region is a key growth driver for Delivery Hero, with Talabat generating €874.7 million in revenue in the second quarter, marking a 37% increase year-over-year.

When asked about potential future sales or IPOs of other units, Ostberg remained non-committal but affirmed that Delivery Hero is open to value-accretive opportunities when they align strategically and financially.