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Aramco Is Said to Pick Top Underwriters for Blockbuster IPO

Dinesh Nair, Myriam Balezou and Archana Narayanan
Aramco Is Said to Pick Top Underwriters for Blockbuster IPO

(Bloomberg) -- Saudi Aramco has picked a slew of banks to work on its planned initial public offering following intense lobbying by some of the world’s top dealmakers, people with knowledge of the matter said.

Aramco selected firms including Bank of America Corp., Citigroup Inc., Credit Suisse Group AG, Goldman Sachs Group Inc., JPMorgan Chase & Co. and Morgan Stanley for top roles on the deal, according to the people. It is choosing as many as nine joint global coordinators including some Middle Eastern banks, the people said, asking not to be identified because the information is private.

The energy giant started telling some banks on Tuesday that they were picked, they said. It plans to hold kickoff meetings with the joint global coordinators as soon as this week or early next week, according to the people. It is considering holding meetings with research analysts during the week of Sept. 22, the people said.

Aramco is speeding up the preparations as it aims to sell shares on the Saudi stock exchange later this year, the people said. It could list as soon as November, one of the people said. The company is still debating the size of the stake it will sell on the local bourse, the people said.

Domestic Listing

The oil producer could first sell around a 1% stake in the domestic market, with the possibility of selling another 1% there at a later date, one person said, while another said Aramco may list at least 3%.

Aramco, officially known as Saudi Arabian Oil Co., declined to comment. Representatives for Bank of America, Citigroup, Credit Suisse, Goldman Sachs, JPMorgan and Morgan Stanley declined to comment.

Chief Executive Officer Amin Nasser said earlier Tuesday that Aramco is going to sell shares “very soon.” The primary exchange for the listing will be the local bourse, Nasser told reporters at an industry conference in Abu Dhabi.

While Aramco has yet to make a decision on its overseas listing venue, top officials from exchanges in London, New York and and Hong Kong have been actively pitching the oil producer.

Relationship Building

Bankers spent the beginning of the month making presentations in Aramco’s headquarters in Dhahran, with some additional meetings in Dubai and London, Bloomberg News has reported. The company invited more than 20 advisory firms from the U.S., Europe and Asia to compete, including some of the world’s biggest underwriters, as well as a number of smaller banks.

It was the final push in what was, for some, years of relationship building with Aramco in the kingdom’s otherwise sleepy Eastern Province. The oil producer was originally working with Evercore Inc. and Moelis & Co., as well as HSBC Holdings Plc, JPMorgan and Morgan Stanley, during its first attempt at an IPO.

The on-again-off-again plans for an Aramco listing had been put on hold as the firm focused on a $69 billion deal for a majority stake in petrochemical maker Saudi Basic Industries Corp. When the preparations were revived this year, many of the banks that won roles initially had to start over, leading some to wonder whether it was worth the effort.

The IPO project was first announced in 2016 as the cornerstone of the kingdom’s Vision 2030 plan to modernize its economy, with a target of listing in the second half of 2018.

--With assistance from Sarah Algethami, Abbas Al Lawati, Matthew Martin and Sridhar Natarajan.

To contact the reporters on this story: Dinesh Nair in London at dnair5@bloomberg.net;Myriam Balezou in London at mbalezou@bloomberg.net;Archana Narayanan in Dubai at anarayanan16@bloomberg.net

To contact the editors responsible for this story: Ben Scent at bscent@bloomberg.net, Amy Thomson, Michael Hytha

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