Spinneys and LuLu’s Public Offerings Pave the Way for Family-Owned Businesses

The IPO of Spinneys and LuLu Group are seen as transformative for the UAE market, which has typically been dominated by government utilities and private corporations in its IPO landscape.

By Melissa Cyrill

In a significant shift for the United Arab Emirates (UAE) market, analysts are hailing the initial public offerings (IPOs) of Spinneys and LuLu’s as a game-changer, setting the stage for other private family-owned businesses to step into the public arena. With Spinneys’ ongoing IPO estimated at around US$375 million and LuLu’s proposed offering, market experts believe these moves will establish a new norm for family-owned enterprises.

Traditionally, IPOs in the UAE have been dominated by government utilities and private corporations. However, the entry of Spinneys and the upcoming LuLu’s IPO signify a departure from this trend, signaling a growing openness among family-owned businesses to tap into public markets.

Spinneys’ IPO is particularly noteworthy as it marks only the second offering by a private family holding in the market—a rarity that has caught the attention of investors. The leading holding company, Al Seer Group LLC, intends to divest a 25 percent stake in its Spinneys 1961 Holdings plc firm, amounting to 900 million shares.

With 75 stores and an estimated 27 percent market share in Dubai, Spinneys has positioned itself as a formidable player in the retail sector. Moreover, its online sales, constituting 13 percent of total revenues, highlight its adaptability to evolving market trends.

Spinneys’ revenues reached AED 2.87 billion (US$781.39 million) in 2023, reflecting an impressive 8.2 percent compound annual growth rate (CAGR) since 2019.

The anticipation surrounding Spinneys’ IPO extends beyond the UAE borders, with Saudi investors expressing keen interest in tapping into the company’s customer base. This sentiment aligns with Spinneys’ reported plans to expand into the Saudi market, further enhancing its appeal to regional investors.

Beyond financial gains, Spinneys’ IPO is poised to deepen Dubai’s capital markets by enhancing liquidity and attracting institutional investors. Additionally, it aligns with the emirate’s broader economic diversification agenda, particularly within the retail sector.

Spinneys intends to finalize its IPO pricing through the book-building process, slated to conclude on May 1, and market observers anticipate that a successful debut will reshape the public market prospects for family-owned businesses.

As the UAE solidifies its status as an innovation hub, the IPO market stands poised for further growth. This upward momentum is expected to draw interest from both local and international companies eager to leverage the UAE’s dynamic and investor-friendly ecosystem. Such developments align with the government’s aspirations to enhance the country’s global reputation and reinforce its position on the world stage.