Abu Dhabi National Hotels (ADNH) is selling a 40% stake in its catering business through an initial public offering on the local bourse, the business said on Monday, as it looks to tap into the region's economic growth.
ADNH Catering, which provides food, cleaning, support services and manpower supply, operates in the United Arab Emirates (UAE) with over 18,000 staff and via a joint venture in Saudi Arabia, where it employs almost 1,000 people.
The Gulf has seen a flurry of IPOs in recent years as governments in countries such as Saudi Arabia and the UAE try to diversify their economies with ambitious reform plans that include deepening capital markets to attract investment.
Abu Dhabi, which generates most of the Gulf state's oil wealth, has attracted a slew of financial firms in recent years and has been investing heavily in tourism, with a target of 39.3 million tourists by 2030 from nearly 24 million in 2023. It also plans to boost hotel room availability to 52,000 by 2030 from 34,000 last year.
"I think it's part of our long-term strategy... and clearly that tourism and travel aspect is high on the agenda," CEO Clive Cowley said when asked about Abu Dhabi's growth efforts to become a tourism and travel hub.
However, Cowley told Reuters the company was planning to also expand in other segments like healthcare and education, adding Saudi Arabia was a "very exciting market" and growth opportunity.
Roadshows with investors will take place next week, he said.
ADNH Catering said in a statement the offer price for the IPO will be determined through a book-building process running from Oct. 7 to 15, with a listing expected as early as next month.
All the 900 million shares on offer will be sold by parent company Abu Dhabi National Hotels, which owns hotels such as the Ritz Carlton and Park Hyatt in Abu Dhabi, as well as the JW Marriott and the Sofitel in Dubai's Marina and Jumeirah Beach, respectively.
Citi and FAB were appointed as joint global coordinators and joint bookrunners for the IPO, while ENBD and ADCB were named joint bookrunners.
