Saudi Aramco will allow investors to start bidding for shares in the world's most-profitable company on Nov. 17 but has left potential buyers in the dark about the size of the stake it plans to sell and the pricing range.
The Saudi stock exchange rules prohibits the oil giant from listing additional shares for six months after the start of trading, according to its more than 650-page prospectus. Also, the Saudi government, the company's sole owner, won't offer any additional shares during the 12-month period after listing, but retains the right to sell to foreign governments or investors affiliated with foreign governments.
Saudi Arabia is pulling out all the stops to ensure the success of the IPO after Crown Prince Mohammed bin Salman finally decided to offer shares in the world's largest oil producer. The kingdom cut taxes on Aramco for a third time, revealed incentives for investors not to sell shares and is considering boosting dividends further.
While the prospectus includes Aramco's profits for the first nine months and details of the company's operations, it doesn't include any indication of what valuation the government hopes to achieve. Price guidance for the share sale is expected this week, but people familiar with the deal say Crown Prince Mohammed bin Salman would be satisfied with a valuation of between $1.6 trillion and $1.8 trillion.