(Bloomberg) -- The family behind high-end supermarket chain Spinneys 1961 Holding plc plans to sell a 25% stake in the company on the Dubai stock exchange in an initial public offering.

Al Seer Group LLC will sell 900 million shares in Spinneys, according to a statement on Tuesday. The subscription period will open April 23 and run until April 30 for institutional investors. It will close a day earlier for retail investors, with the shares expected to start trading in May.

Spinneys will be among the first batch of family-owned businesses to go public in the United Arab Emirates, where state-owned companies have dominated listing activity. Last year, money exchange firm Al Ansari Financial Services PJSC listed in Dubai in one of the first IPOs by a private company in the Gulf country.

Governments across the Persian Gulf have driven an IPO boom since late 2021 as they seek to fund the diversification of their economies away from fossil fuels. High oil prices and increased investor inflows made the region a bright spot for listings even as they slumped globally due to rising interest rates.

News of the grocer’s IPO comes in a moment of elevated Middle East tensions after Iran launched its first-ever attack on Israel from its own soil over the weekend, although the impact on regional markets has so far been muted.

“You look at the performance of the stock markets, whether it is in Saudi Arabia or in the UAE, it doesn’t have an effect,” Sunil Kumar, chief executive officer of Spinneys, said in an interview.

“Investors understand this region and understand the potential for them to grow the business and different portfolios,” he said. Spinneys is a rare private-sector IPO coming to market with both a plan to distribute dividends and a track record of expansion, according to Kumar.

Saudi Expansion

Spinneys plans to maintain a dividend payout ratio of 70% of annual distributable profits after tax for fiscal 2024 and the following years. The company made a profit of 254 million dirhams ($68 million) in 2023, an 18.7% increase from 2022.

Owned by the Al Bwardy family, Spinneys opened its first store in 1961 and now operates 75 supermarkets under the Spinneys, Waitrose and Al Fair brands in the UAE and Oman. It plans to open its first store in Saudi Arabia in the first half of this year and another three by the end of 2024, Kumar said.

The grocery chain is counting on the UAE’s increasingly affluent population as well as its Saudi expansion for growth opportunities. 

Spinneys intends to open at least four stores in the kingdom every year for the next five to 10 years, he said.

Emirates NBD Capital, Bank of America Corp., and HSBC Holdings Plc are joint global coordinators for Spinneys’ IPO, while Rothschild & Co is the independent financial adviser.

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(Updates with Spinneys CEO comments.)

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