Herfy Food Services Co, the Saudi replica of fast-food chains McDonald's and Burger King, plans to raise 413.1 million riyals ($110.2 million) from an initial public offering starting next week, the firm said on Saturday. The company will sell 8.1 million shares, or 30 percent of its capital, at 51 riyals each, over the January 11-17 period, it said in its listing prospectus. Proceeds of the sale will go to Herfy's shareholders, it said, adding: "Herfy will not get any part of the IPO's proceeds."
The firm was set up in 1981 by US-educated businessman Ahmed al-Said who was inspired by "the fast-food craze then sweeping the world", according to its website. In 1998, Savola Group - the Middle East's biggest edible oil manufacturer and sugar refiner - became among Herfy's shareholders. Savola's stake in Herfy will decrease to 47.6 percent after the IPO from the current 68 percent or by about 5.51 million shares while that of its founder Ahmad al-Said will decline to 20.3 percent from 29 percent or by about 2.35 million shares, the prospectus showed. Proceeds from the IPO are expected to boost Savola's earnings during the first quarter.
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