Saudi Aramco to launch giant stock offering November 17

Riyadh: Saudi Aramco said it would start taking bids from investors on November 17 in a highly anticipated stock offering, as it released a prospectus that did not disclose the size of the sale or the pricing range.
The 658-page document said the final share price would be determined on December 5, a day after subscriptions close, in what is expected to be the world’s biggest initial public offering.
After years of delays and false starts, Aramco officials last week announced a share sale on the Riyadh stock exchange for the world’s most profitable company, which pumps 10 percent of the world’s oil.
The prospectus, released just before midnight Saturday, said the state giant would sell up to 0.5 percent of its shares to individual investors but that it had still not decided on the percentage for larger institutional buyers.
Saudi investors appear keen on the prospect of owning a piece of the company, seen as the kingdom’s economic crown jewel, despite concerns over the future of oil and the firm’s valuation and governance.
The firm said it had hired a host of international banking giants including Citibank, Credit Suisse and HSBC as financial advisors and bookrunners.
In its push for transparency, the secretive company’s prospectus also highlighted risks including the potential for terrorist attacks, the possibility of antitrust legislation and climate change concerns that could reduce global demand for hydrocarbons.
“The disclosure, transparency combined with the global research and analysis that it will provoke is in itself of major value to the kingdom and the company,” said Ali Shihabi, founder of the now-shuttered pro-Saudi think-tank Arabia Foundation.
However key details were missing from the prospectus, including the company’s valuation and how much Aramco expects to raise from the IPO.
It is unlikely to hit its $100 billion target, based on a $2 trillion valuation that de facto ruler Crown Prince Mohammed bin Salman had initially hoped for.
Investment research firm Bernstein estimates the valuation could fall between $1.2 and $1.5 trillion.
Based on a $1.5 trillion valuation, a two percent stake sale would help Aramco raise $30 billion.
That would still make it the world’s biggest IPO, eclipsing Chinese retail giant Alibaba’s $25 billion listing in 2014. AFP