Aramco Sees Nearly Enough Early Orders to Pull Off IPO

Saudi Aramcos bankers are seeing sufficient early demand to pull off the state oil giants initial public offering just three days after launching the deal, people with knowledge of the matter said.
The IPO arrangers are indicating in private discussions that they already have nearly enough orders to cover the institutional portion of the deal, the people said, asking not to be identified because the information is private. They still have more than two weeks to go, as fund managers can subscribe to the stock until Dec. 4, according to Aramcos prospectus.

Building early momentum is important in large equity offerings, as investors are encouraged to jump in when they see other institutions rushing to buy shares. The precise amount of real demand will only become clear later once underwriters compare the orders theyve received, the people said.

Saudi authorities have been pulling several levers to try and make the deal a success, pressuring the kingdoms richest families to invest and loosening margin lending rules for banks. Theyve been negotiating commitments from the billionaire Olayan family, who own a major stake in Credit Suisse Group AG, and Saudi Prince Alwaleed Bin Talal, Bloomberg News reported earlier this month.

Domestic Pitch

Aramco representatives have also been seeking investments from the Almajdouie family, who distribute Hyundai Motor Co. vehicles in the kingdom, and members of the Al-Turki clan, people with knowledge of the matter have said. Saudi Arabias sovereign wealth fund is seeking to sell about a 1.5% stake in Aramco at a valuation of as much as $1.71 trillion, with about a third of the offering set aside for retail investors.

Aramco, officially known as Saudi Arabian Oil Co., declined to comment.

The Wall Street banks working on the transaction are set to lose out on a highly anticipated fee windfall after the deal was pared back from a record global offering to a mainly domestic affair. The foreign underwriters will be compensated for costs but may nRead More – Source