Delivery Hero SE has hired banks to work on the listing of its Talabat unit in Dubai, preparing to cash in on a flood of initial public offerings (IPOs) in the Gulf.

The German food delivery company has lined up Emirates NBD Bank PJSC, Morgan Stanley and JPMorgan Chase & Co for the deal, people familiar with the matter said, asking not to be named discussing confidential information. The share sale could raise about US$1 billion , they said.

No final decisions have been made on valuation, and more banks could be added, the people said. Representatives for Emirates NBD, Morgan Stanley, JPMorgan, Delivery Hero and Talabat declined to comment.

Delivery Hero has said it’s planning to list Talabat on Dubai’s bourse in the fourth quarter. That came amid a pickup in Gulf initial public offerings after a quiet summer. 

Last week saw a flurry of announcements from firms ranging from a perfume maker and flour miller to an oil services provider and a food delivery company. Many of the deals were oversubscribed within hours.

Talabat is estimated to have an enterprise value of more than €5.4 billion , according to Bloomberg Intelligence. RBC Capital Markets, meanwhile, pegs Delivery Hero’s Middle East and North Africa business at €5 billion, implying a valuation of 1.3 times enterprise value-to-sales. 

The highly profitable Middle Eastern unit could help Delivery Hero unlock cash upfront and bolster liquidity, but “long-term reduced ownership means leaking the vital cash flow to Talabat’s new shareholders”, Bloomberg Intelligence analysts Tatiana Lisitsina and Diana Gomes wrote.

  - Bloomberg