Al Futtaim plans Spinneys deal, in $500 mln stake
Majid Al Futtaim has 12 shopping malls in the Middle East
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Majid Al Futtaim Holding, which bought Carrefour's 25 per cent stake in its Middle East joint venture, may buy part of the Spinneys supermarket franchise to expand its retail offerings across the region.
The Dubai-based company is in the "early stages" of looking at buying Abraaj Group's stake in the Spinneys Middle East franchise outside of the United Arab Emirates, Majid Al Futtaim Chief Executive Officer Iyad Malas said in an interview at the World Economic Forum in Jordan yesterday.
"The opportunities around acquisitions have been and are primarily going to be in retail, meaning supermarkets and hypermarkets," Malas said.
The Spinneys deal would be worth "below $500 million," he further added.
Expanding across the ME
Majid Al Futtaim, also known by its acronym MAF, is expanding across the Middle East, tapping the rising disposable income of the region's growing population. The company last week bought Carrefour's minority stake in Majid Al Futtaim Hypermarkets for 530 million euros ($681 million). It also expects to complete talks with Egypt's Mansour Group for the acquisition of its Metro supermarket chain in a "few weeks," Malas said.
Spinneys is "one of the companies which we mentioned several times at looking at potentially exiting," Ahmed Badreldin, partner and head of Middle East and North Africa (Mena) at Abraaj said in an interview.
"It's a matter of finding the right buyer profile and the right timing," he further added. Spinneys was founded in Alexandria in 1924 and acquired by Abraaj, the region's biggest buyout firm, in 2004. The retailer has outlets in Egypt, Jordan, Lebanon and Qatar and operates in the UAE under franchise.
Majid Al Futtaim plans to raise about $500 million next week to fund the Carrefour acquisition by selling dollar-denominated perpetual securities, Malas said. The company is holding investor meetings in the United Arab Emirates, Asia and Europe from May 26. It had hired Goldman Sachs Group and HSBC Holdings as structuring advisers and BofA Merrill Lynch, JPMorgan Chase and Standard Chartered as bookrunners.
Bond sale in June 2012
Majid Al Futtaim, rated the second-lowest investment grade by Standard & Poor's at BBB, last sold bonds in June 2012 when it raised $500 million from the sale of seven-year notes.
Majid Al Futtaim's revenue rose 10 per cent to Dh21.6 billion ($5.9 billion) last year as it opened seven new Carrefour stores and a shopping mall. The company, established in 1992, operates 50 hypermarkets and 44 supermarkets under the Carrefour brand in the Middle East, North Africa and Central Asia.
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