Bloomberg— Foreign investors will be allotted about 60% of the shares on offer in Saudi Aramco’s $11.2 billion share sale, said people familiar with the matter, marking a turn from the oil giant’s 2019 public offering that ended up being a largely local affair.
The operation generated strong demand from the US and Europe, according to the people, who declined to be identified since the information is private. Funds from the United Kingdom, Hong Kong and Japan They also supported the sale of shares which attracted orders worth more than US$65 billion in total, people said.
During the listing of the oil giant, Foreign investors had largely rejected valuation expectations and left the government dependent on local buyers. The $29.4 billion IPO attracted orders worth $106 billion, with only 23% of the shares allocated to foreign buyers.
Aramco representatives were not immediately available for comment.
A key attraction this time is the company’s dividend, which is one of the largest in the world. Investors willing to look beyond strong valuation and lack of buybacks they would charge an annual disbursement of US$124,000 million which Bloomberg Intelligence estimates will give the company a return of 6.6%.
Saudi Arabia attracted enough bids to cover all shares within hours of launching the operation. The deal closed on Thursday and will see the kingdom net proceeds of at least $11.2 billion, excluding over-allotments, cash that will help finance a multibillion-dollar push to transform the economy.
The final price was towards the lower half of a proposed range of 26.70 riyals to 29 riyals, although Aramco shares have traded below the upper end since the deal was announced and closed at 28.30 riyals on Thursday.
The extent of foreign participation was closely monitored, and Aramco’s top executives held a series of events in London and the United States to raise the lawsuit.
The Saudi government owns about 82% of Aramco, while the Public Investment Fund owns another 16% stake. The kingdom will remain the main shareholder after the offer.
Read more at Bloomberg.com
