Delivery Hero CEO Says Talabat IPO Leaves Parent ‘Undervalued’

For Delivery Hero SE, the public listing of its Middle Eastern unit brings a much needed cash windfall — and a vexing problem.

On Friday, the German delivery firm set the initial public offering for Talabat in Dubai at the top of its price range, implying a market capitalization of $10.2 billion. That’s within striking distance of the €10.9 billion ($11.5 billion) valuation of the parent company.

It leaves Delivery Hero with the difficult task of maintaining growth at Talabat, where it retains an 80% ownership, while convincing the market that its remaining assets are worth far more.

“I ...