UAE retailer Union Coop explores going public

Alamy/Marek Slusarczyk via Reuters

• Listed in 2022 as a cooperative
• Move will open up shares
• Encouraged by recent IPOs

Dubai retailer and mall owner Union Coop has begun exploring a transition from a consumer cooperative society to a public joint-stock company. 

The company said the move is aimed at increasing its presence, expanding its operations and maximising its financial resources.

Dubai-based law firm Al Tamimi Company has been appointed to conduct a study exploring the transformation.

Becoming a public joint-stock company will allow Union Coop to trade its shares on stock exchanges, which means it will be subject to stricter regulatory requirements. 

It will also allow greater access to its shares, which are currently restricted to Emirati shareholders. 

Union Coop listed its shares on the Dubai Financial Market in 2022 but remained a consumer cooperative society. 

That came shortly after the UAE approved a decision to let cooperative associations trade their shares on the local financial markets to encourage more local initial public offerings (IPOs) and boost the strength of its bourse.

The decision allowed coops to raise new capital and expand their portfolios.

The shares traded on debut 18 percent below their indicated price of AED3.90. On Wednesday, shares were trading at AED2.26. 

They were listed at a time when other listings in the Gulf were not performing as well as expected, like Tecom, which was 17 percent below price. 

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IPOs in recent years have performed considerably better. Demand from investors, especially foreign institutions, for new Gulf IPOs and for greater exposure to the Gulf’s economies, indicates a growing confidence in the region, AGBI reported last month. 

Retailers, in particular, have been listed successfully in the UAE in recent weeks, with both Lulu Retail Holdings and Spinneys listing on the Abu Dhabi Securities Exchange and the DFM, respectively.

Founded in 1982, Union Coop has 27 hypermarket branches across the UAE. It also owns eight shopping centres – Al Warqa City Mall, Etihad Mall, Al Barsha Mall, Al Barsha South Mall, Nad Al Hamar Centre, Al Nahda, Motor City and Silicon Oasis. 

It launched a chain of stores under the name ‘Coop’, which has four outlets and one branch of its smaller ‘Mini Coop’ chain. 

In its latest quarterly earnings, the company reported a net profit of AED49.56 million ($13.49 million), up 17 percent year on year. 

Sales for the quarter reached AED430 million ($117 million), up 4 percent on the same period last year.