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Nov. 17, 2019, 5:04 p.m. EST

Aramco IPO seeks valuation up to $1.7 trillion, well short of original goal

Saudi oil giant’s offering could still be the biggest ever

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By Ben Dummett


Reuters
An Aramco oil tank is seen at Saudi Aramco's Shaybah oilfield.

Saudi Aramco said it is aiming for a valuation of $1.6 trillion to $1.7 trillion from the planned initial public offering of the state-owned energy giant, falling well short of the initial $2 trillion targeted by Saudi Crown Prince Mohammed bin Salman in what could still be the world’s biggest ever IPO.

In a statement Sunday, Aramco said that it aims to price the offering at between 30 and 32 Saudi Arabian riyal (between $8 and $8.52) a share and sell a stake of 1.5%, or 3 billion shares, in the IPO. At the midpoint of the price range, Aramco would raise almost $25 billion from the issue. In 2014, Alibaba Group Holding Ltd. /zigman2/quotes/201948298/composite BABA +3.23%   raised $25 billion with its IPO.

Aramco’s IPO would give it a total valuation of $1.65 trillion. That would mark a big comedown for MBS, as the crown prince is commonly known, from the initial goal of selling $100 billion worth of stock from the sale of up to a 5% stake in the IPO and a targeted $2 trillion company valuation from the offering.

The valuation target comes amid an aggressive marketing push internationally and domestically by Saudi Arabian Oil Co., or Saudi Aramco, and its advisers to woo investors to participate in the massive IPO. That effort has included scores of meetings with sovereign-wealth funds and other big money managers in major financial centers in the U.S., Middle East, Asia and Europe. Locally, Saudi Arabia’s middle class has been targeted by a wide-ranging marketing campaign, urging it to invest in the company.

An expanded version of this report appears on WSJ.com.

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/zigman2/quotes/201948298/composite
US : U.S.: NYSE
$ 200.00
+6.26 +3.23%
Volume: 22.31M
Dec. 5, 2019 6:30p
P/E Ratio
23.83
Dividend Yield
N/A
Market Cap
$507.19 billion
Rev. per Employee
$781,259
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