JEDDAH, 9 April 2006 — The initial public offering (IPO) of the Saudi Research & Marketing Group (SRMG) began yesterday with a large number of Saudis lining up at the branches of five banks across the country to purchase shares for SR46 each. Some 24 million shares were floated for public subscription.
Prince Faisal Bin Salman, chairman of SRMG, held talks here yesterday with Eissa Al-Eissa, managing director and CEO of Samba Financial Group, which is managing the company’s IPO, as well as representatives of other participating banks. Also involved in the talks were Giel-Jan van der Tol, managing director of Saudi Hollandi Bank, Talal Al-Qudaibi, chief executive of Riyad Bank, Majed Al-Quwaiz, vice chairman of Riyad Bank, Taha Al-Quwaiz, deputy general manager of National Commercial Bank, and Abdul Rahman Jawa, deputy managing director of Banque Saudi Fransi.
Prince Faisal and the bankers discussed matters related to public subscription of SRMG shares. He also thanked the manager of the IPO (Samba) and other banks taking part in the flotation, a press statement issued by SRMG said.
SRMG is offering 30 percent of its shares in the first such IPO launched by a media organization in the Arab world. Prince Faisal said the flotation of shares would be a “qualitative addition” to the Saudi stock market because of the company’s strong financial standing. “The IPO will pave the way for a new era in the development of the company, which is the largest integrated media organization in the Arab world,” the SRMG chief said, adding that the group had made tremendous achievements in the past few years.
He said the purchase of 5.62 percent of SRMG by the General Organization for Social Insurance and the Pension Fund would strengthen investor confidence. He also referred to measures taken by the group’s board of directors to promote its activities and investments.
Azzam M. Al-Dakhil, SRMG’s executive vice president, said the group was the first company to go public after the recent decision taken by the Capital Market Authority (CMA) splitting the nominal share value from SR50 to SR10 per share. “The value of an SRMG share is now SR46 after the share split and after adding the premium,” Al-Dakhil said. Earlier, the price was SR230 per share, including the premium, he explained.
Samba said it had taken all measures for the smooth functioning of the IPO, which continues until April 17 and is restricted to Saudis. “We have distributed three million copies of subscription forms to banks across the Kingdom so they can meet subscribers’ needs,” Al-Eissa said.
He urged potential investors to make use of electronic means to complete subscription procedures in order to avoid overcrowding at banks. Investors should also follow the rules and regulations for the IPO. A single investor can purchase a minimum of 50 shares for SR2,300 and a maximum of 25,000 shares for SR1.15 million.
SRMG posted a record net profit of SR181.4 million last year which was the best in the company’s history. There was a 12-percent increase, or SR113.6 million in sales, compared to 2004 when total sales were SR1.063 billion.
