KFC operator’s shares surge on market debut

Americana Restaurants International, whose recent initial public offering was oversubscribed 58 times to generate orders of $105 billion, climbed following the first-ever concurrent dual listing on the Abu Dhabi Securities Exchange (ADX) and the Saudi Stock Exchange on Monday.

Shares of the region's largest out-of-home dining and quick-service restaurant operator gained 13 per cent in Abu Dhabi to Dh2.95 and rose 6.7 per cent in Riyadh to SR2.86.

The IPO of the KFC and Pizza Hut operator offering 30 per cent of the company’s total issued share capital has raised gross proceeds of $1.8 billion and saw strong demand from institutional and retail investors.

Priced at the top of the offer price range (Dh2.62 per share in the UAE and SR2.68 per share in Saudi Arabia), Americana Restaurants has a market capitalisation of $6.01 billion (equivalent to Dh22.07 billion or SR22.58 billion) at the time of listing.

Mohamed Ali Rashed Alabbar, chairman of Americana Restaurants, rang the market opening bell for the official dual listing ceremony on Monday at ADX, accompanied by Hisham Khalid Malak, chairman of ADX.

Raid Abdullah Ismail, board member, Americana Restaurants, rang the market opening bell at the Saudi Exchange, accompanied by Mohammed Al Rumaih, CEO of Saudi Exchange, along with other board members, senior executives, and officials from the UAE and Saudi Arabia.

The Middle East's IPO boom stands in sharp contrast to most other markets, where IPOs have slumped sharply because of concerns over soaring inflation and rising interest rates, coupled with recession risks in the US and Europe. Gulf IPOs are on track to raise more than $20 billion this year that would have been an annual record if it weren't for 2019 when Aramco had its $29.4 billion IPO.

“ADX continues to foster collaboration across the region and is proud to play an increasingly central and pivotal role in the regional capital market landscape. The dual listing of Americana Restaurants on ADX and Saudi Exchange is another great step in this direction and is a prime example of how Abu Dhabi continues to enhance its status as a premier investment destination and home to business,” said Malak.

“In support of Abu Dhabi’s sustainable growth and diversification, we continue to attract top-tier issuers to our market, expand our offering and enhance the diversification of our growing and dynamic capital market ecosystem,” he added.

Alabbar said the concurrent dual listing marks the first-of-its-kind transaction. “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," he said.

"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,” he said.

Al Rumaih said over the last few years, the Saudi Exchange has implemented a range of initiatives to enhance the infrastructure of the Saudi capital market.

“The dual listing of Americana Restaurants is the first of its kind to take place on the Saudi Exchange, paving the way for other non-Saudi issuers to offer their shares and list on the Saudi Exchange, contributing to further diversification and broadening of the opportunities available in the Saudi capital market.”

The selling shareholder Adeptio AD Investments, a special-purpose vehicle owned indirectly by the Public Investment Fund and Alabbar, sold 2.527 billion existing ordinary shares in the IPO.

Immediately following the listing, Americana Restaurants will have a free float of 33.97 per cent of its issued share capital.

Shares traded in both Saudi Exchange and ADX will not have any trading limits in the first three days. However, after the first three trading days, the shares listed on the Saudi Exchange and on ADX will be subject to the normal fluctuation limits that apply to all shares traded on the two exchanges, the company said in a statement.

— issacjohn@khaleejtimes.com

• Business