Today Saudi Aramco isn’t just shunning New York -- and other international exchanges -- as a listing venue, but has decided it won’t even market the IPO to American, Canadian, European or Japanese investors. Instead, Aramco plans to rely heavily on ultra-wealthy Saudis, many of whom have been pressed to invest, to get the deal done. Saudi banks are loosening lending regulations to allow locals to buy more shares.
LONDON: Two years ago, when the initial public offering of Saudi oil giant Aramco held the imagination of foreign investors, President Donald Trump felt compelled to publicly lobby for the share sale to happen in America.
"Would very much appreciate Saudi Arabia doing their IPO of Aramco with the New York Stock Exchange, ” Trump tweeted in November 2017.
Today Saudi Aramco isn’t just shunning New York -- and other international exchanges -- as a listing venue, but has decided it won’t even market the IPO to American, Canadian, European or Japanese investors.
Instead, Aramco plans to rely heavily on ultra-wealthy Saudis, many of whom have been pressed to invest, to get the deal done. Saudi banks are loosening lending regulations to allow locals to buy more shares.
The IPO once was promoted as the strongest sign of economic change in Saudi Arabia: the deal that was going to attract tens of billions of foreign capital into the kingdom.
Instead, a slimmed down share sale is starting to look more like a levy on the country’s economy as Saudi investors, large and small, take the place of foreign money managers.It may well still be the world’s largest IPO, perhaps raising about $25 billion and valuing the company at $1.6 trillion to $1.7 trillion, well above the biggest names of Silicon Valley.
But that’s short of the $100 billion that Saudi Crown Prince Mohammed bin Salman said he was hoping to raise when he first mooted the IPO in 2016. At that point, he targeted a valuation of at least $2 trillion.
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