Aramco's $12B Share Sale Oversubscribed in Record Time
In May, Saudi Arabia announced that it is planning a multi-billion-dollar share sale in the energy giant Aramco.
Saudi Aramco's highly anticipated $12 billion share sale has witnessed a surge in demand, with all shares being snapped up mere hours after the deal opened on Sunday, according to details obtained by Bloomberg.[1]
Read More: Saudi Arabia Plans Aramco Shares Sale
The price of one share ranged between SAR 26.70 ($7.12) and SAR 29 ($7.73).
While the precise breakdown of demand sources remains undisclosed, insiders suggest a balanced mix of local and foreign investors contributed to the robust demand.
The opportunity to get one of the largest dividends in the world is a major selling feature of the most recent offer. Investors would profit from an estimated $124 billion yearly payout, or 6.6% dividend yield, according to Bloomberg Intelligence.
The offering coincides with OPEC+'s decision to extend production cuts into 2025.
The company's current valuation stands at approximately $1.8 trillion, down 14% since the beginning of the year.
Following the sale, the Saudi government will maintain its majority ownership of Aramco.
Moelis & Co. and M. Klein & Co. acted as independent financial advisers.
The lead manager was SNB Capital. It also acted as a joint global coordinator along with Citigroup Inc., Goldman Sachs Group Inc., HSBC Holdings Plc, JPMorgan Chase & Co., Bank of America Corp., and Morgan Stanley.
Al Rajhi Capital, BOC International, BNP Paribas SA, China International Capital Corp., EFG Hermes, Riyad Capital, Saudi Fransi Capital, and UBS were the bookrunners.
With plans to offload a 0.64% stake initially, the government retains the option to further capitalize on investor appetite, potentially raising an additional $1.2 billion.
During Aramco's 2019 IPO, global investors mainly balked at valuation estimates, leaving the government reliant on domestic buyers. The $29.4 billion IPO received $106 billion in orders, with international purchasers receiving approximately 23% of the shares.
In May, Saudi Arabia announced that it was planning a multi-billion-dollar share sale in the energy giant Aramco.