Saudi Aramco sets IPO share price between 30-32 riyals for ‘sale of the century’

Saudi Aramco also intends to buy $1 billion worth of shares for employees under a plan to incentivize executives and staff members. (AFP)
Updated 18 November 2019

Saudi Aramco sets IPO share price between 30-32 riyals for ‘sale of the century’

  • Final pricing for the Aramco shares would be announced on Dec. 5
  • The IPO could be worth least $24 billion, and values the state-owned oil giant at up to $1.71 trillion

DUBAI: The Saudi Arabian “sale of the century” — the initial public offering of shares in Saudi Aramco — moved into top gear with the announcement of pricing details and official valuation of the most profitable company in the world.

The Kingdom will sell a total of 3 billion shares in Aramco — around 1.5 percent of the total — at a valuation between SR30 ($8) and SR32 per shares, giving a total valuation of between $1.6 trillion and $1.7 trillion, making it the most valuable company in history.

Investment professionals welcomed the valuation, which was lower than the highest estimates of Aramco’s worth, as a “compromise” between the Kingdom and the financial world.

Tarek Fadhallah, CEO of Nomura Asset Management in the Middle East, said: “My first impression is that the price is a sensible compromise and that it will sell the IPO.”

*********

READ MORE: 

For more of our coverage of the Aramco IPO, click here.

To view key Aramco IPO documents, click here.

*********

Setting the price range and the number of shares to be sold starts the “bookbuilidng” process during which Aramco and its advisers will consult with potential investors and await bids from the institutions and private investors to decide at what level the shares will finally be sold.

A final pricing decision will come on Dec. 5, and trading is expected to start on the Tadawul shortly after.

Private investors — Saudi nationals, resident expatriates and Gulf nationals — will have to decide how many shares they want at the SR32 level, and wait to see if their application will be met in full.

If the final price is set lower than the top of the range, investors can have their money refunded or take up extra shares to an equivalent value.Aramco has decided not to market the shares via “roadshows” in certain markets because of a relaxation of Riyadh market rules that will allows foreign investors to buy shares on Tadawul.

The value of the stock on offer in the IPO will be between $24 billion and $25.6 billion — beating the existing record for a share issue set by Alibaba on the New York Stock exchange in 2014.

The proceeds from the sale — earmarked for investment into the diversification of the Saudi economy under the Vision 2030 reform plans — could go even higher depending on demand, with an extra chunk of shares allocated to advisers as part of the price stabilization mechanism.

Aramco is also committed to buying $1 billion in shares for its employees in an incentive scheme.


Dubai’s Al-Habtoor Group to open representative office in Israel

Updated 20 September 2020

Dubai’s Al-Habtoor Group to open representative office in Israel

  • Al-Habtoor and Fogel both welcomed the landmark agreement that was signed on Sept. 15 in the US
  • The tycoon revealed his plans to open a representative office in Israel

DUBAI: Dubai’s Al-Habtoor Group (AHG) plans to open a representative office in Israel its chairman said, following an historic peace deal signed last week between the UAE and Israel to normalize relations.

Khalaf Ahmad Al-Habtoor, who is AHG founding chairman, welcomed Ampa Group’s co-owner, chairman and CEO Shlomi Fogel at the hospitality conglomerate’s Dubai headquarters. Ampa Group deals in real estate, finance and industry. 

Al-Habtoor and Fogel both welcomed the landmark agreement that was signed on Sept. 15 in the US. 

The UAE and Bahrain signed the Abraham Accords in a ceremony overseen by US President Donald Trump. The two Gulf countries join Egypt and Jordan as the only Arab nations to have full relations with Israel.

“I have been looking forward to this day for a very long time,” Al-Habtoor said. “I have always believed that Emiratis and Israelis have a lot in common. Both peoples are business-oriented and have relied on human talent and ambition more than their countries’ natural resources to build robust, innovative economies. The opportunities that this deal will present are great for both sides. I am confident this will open up new doors and lead to stronger economies, and closer cultural ties between the peoples.”

The tycoon revealed his plans to open a representative office in Israel and said that there was a lot of interest in collaboration.

“We have received a large number of inquiries for collaboration in several fields, ranging from AI and technology, to agriculture, hospitality and trading. The possibilities are endless for both sides in our diversified fields and new ones, and we want to be present to grasp them.”

He previously disclosed that AHG had started talks with Israeli domestic carrier Israir Airlines to open direct commercial flights, “and we are preparing to reveal a few collaborations in the coming days.”

Fogel said that peace would be cemented through successful business collaboration and trade. “Together with our Emirati counterparts we will show the way to live in peace to the rest of the world,” he added.

Fogel was accompanied at the meeting by Ampa Group executives, including Erez Katz and Saar Bracha.

AHG was represented at the meeting by Mohammed Al-Habtoor, Ahmad Al-Habtoor, Maan Halabi, Sanjeev Agarwala and other members of senior management.