Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Aramco meets investors in last-minute bid to hit $2 trillion IPO target

Aramco meets investors in last-minute bid to hit $2 trillion IPO target

Saudi Aramco officials and advisers are holding last-minute meetings with investors in an attempt to achieve as close to a $2 trillion valuation ahead of an expected Sunday announcement that the initial public offering (IPO) will go ahead, according to three sources.

Failure to reach the target would cause a dilemma for Saudi Crown Prince Mohammed bin Salman - swallow the bitter pill of going ahead at a lower valuation or postpone the initial public offering (IPO) once again.

The Aramco officials and advisers are meeting institutional investors around the world, according to the three people familiar with the matter. Chief executive Amin Nasser has been meeting investors in New York and London this week, they added.

Saudi Arabia’s crown prince on Friday approved the go ahead of the IPO of state oil giant Aramco, five sources familiar with the matter told Reuters.

The main sticking point remains the $2 trillion valuation, which has often been considered too ambitious by advisers and some insiders, according to the three sources. A valuation closer to $1.5 trillion is more likely, with wealthy Saudi families the main investors in the IPO, they said.

“Saudi Aramco does not comment on rumours or speculations,” the company said in an emailed response to Reuters’ queries about the meetings and IPO launch date. Aramco added it was ready for the IPO, and that the timing would depend on market conditions.

Saudi energy minister Prince Abdulaziz said on Wednesday that it would be a Saudi decision, specifically by Crown Prince Mohammed.

A weak outlook for oil prices, against a gloomy global economic picture and increasing climate change activism, could dampen investor interest, particularly in the Western world.

“Aramco’s officials and advisers are still on the road,” said one of the sources, a major institutional investor.

Saudi Arabia is separately still holding government-to-government meetings to attract investment from sovereign wealth funds, the investor added.

The state-owned oil major has also approached governments in the Gulf and Asia, including China, to try to secure the bulk of the investment from countries on friendly terms with Saudi Arabia, as the reception elsewhere has been cooler, sources have previously said.


DIVIDEND PAYOUT

The listing is the centrepiece of the crown prince’s plan to shake up the Saudi economy and diversify away from oil. But there have been various delays since the 2016 announcement. A launch is now expected on Sunday, sources have previously said.

Aramco has said it will pay a base dividend of $75 billion, which at $2 trillion would mean a dividend yield of 3.75%, below those already offered by competitors like Exxon Mobil Corp (XOM.N) and Royal Dutch Shell (RDSa.L).

Shell’s dividend yield is over 6% and Exxon’s over 5%, according to Refinitiv data.

Oil majors have been raising payouts to shareholders over the past years to counter rising pressure from climate activism on investors to dump oil stocks and help the world switch to cleaner fuels such as wind and solar.

To achieve $2 trillion, in the largest IPO in history, Riyadh needs the initial listing of a 1% to 2% stake on the Saudi market to raise at least $20 billion to $40 billion.

Prince Mohammed wants to eventually list a total of 5% of the company. An international sale is expected to follow the domestic IPO.

The close relationship between new Aramco chairman Yasser al-Rumayyan, who also heads the PIF, the kingdom’s sovereign wealth fund, with the crown prince was a governance concern of some investors, the sources said.

The PIF (Public Investment Fund) will use the proceeds of the Aramco IPO sale to deliver on the prince’s ambitious domestic and economic reforms.

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Russian Research Vessel 'Yantar' Tracked Mapping Europe’s Subsea Cables, Raising Security Alarms
Global Cruise Industry Posts Dramatic Comeback with 34.6 Million Passengers in 2024
U.S. Demands Brussels Scrutinize Digital Rules to Prevent Bias Against American Tech
Private Equity’s Fundraising Surge Triggers Concern of European Market Shake-Out
Tokyo’s Jimbōchō Named World’s Coolest Neighbourhood for 2025
European Officials Fear Trump May Shift Blame for Ukraine War onto EU
The Personality Rights Challenge in India’s AI Era
Italy Considers Freezing Retirement Age at 67 to Avert Scheduled Hike
Italian City to Impose Tax on Visiting Dogs Starting in 2026
Study Finds No Safe Level of Alcohol for Dementia Risk
Trump Says Ukraine Can Fully Restore Borders with NATO Backing
Europe Signals Stronger Support for Taiwan at Major Taipei Defence Show
Germany Weighs Excluding France from Key European Fighter Jet Programme
Cyberattack Disrupts Check-in and Boarding Systems at Major European Airports
Björn Borg Breaks Silence: Memoir Reveals Addiction, Shame and Cancer Battle
When Extremism Hijacks Idealism: How the Baader-Meinhof Gang Emerged and Fell
JWST Data Brings TRAPPIST-1e Closer to Earth-Like Habitability
Trump Orders $100,000 Fee on H-1B Visas and Launches ‘Gold Card’ Immigration Pathway
France’s Looming Budget Crisis and Political Fracture Raise Fears of Becoming Europe’s “Sick Man”
Three Russian MiG-31 Jets Breach Estonian Airspace in ‘Unprecedentedly Brazen’ NATO Incident
European manufacturers against ban on polluting cars: "The industry may collapse"
Turkish car manufacturer Togg Enters German Market with 5-Star Electric Sedan and SUV to Challenge European EV Brands
Christian Brueckner Released from German Prison after Serving Unrelated Sentence
World’s Longest Direct Flight China Eastern to Launch 29-Hour Shanghai–Buenos Aires Direct Flight via Auckland in December
New OpenAI Study Finds Majority of ChatGPT Use Is Personal, Not Professional
The conservative right spreads westward: a huge achievement for 'Alternative for Germany' in local elections
Pope Leo Warns of Societal Crisis Over Mega-CEO Pay, Citing Tesla’s Proposed Trillion-Dollar Package
Poland Green-Lights NATO Deployment in Response to Major Russian Drone Incursion
U.S. and China Agree on Framework to Shift TikTok to American Ownership
Le Pen Tightens the Pressure on Macron as France Edges Toward Political Breakdown
Czech Republic signs €1.34 billion contract for Leopard 2A8 main battle tanks with delivery from 2028
Penske Media Sues Google Over “AI Overviews,” Claiming It Uses Journalism Without Consent and Destroys Traffic
Indian Student Engineers Propose “Project REBIRTH” to Protect Aircraft from Crashes Using AI, Airbags and Smart Materials
One in Three Europeans Now Uses TikTok, According to the Chinese Tech Giant
Could AI Nursing Robots Help Healthcare Staffing Shortages?
NATO Deploys ‘Eastern Sentry’ After Russian Drones Violate Polish Airspace
The New Life of Novak Djokovic
German police raid AfD lawmaker’s offices in inquiry over Chinese payments
Volkswagen launches aggressive strategy to fend off Chinese challenge in Europe’s EV market
France Erupts in Mass ‘Block Everything’ Protests on New PM’s First Day
Poland Shoots Down Russian Drones in Airspace Violation During Ukraine Attack
Apple Introduces Ultra-Thin iPhone Air, Enhanced 17 Series and New Health-Focused Wearables
Macron Appoints Sébastien Lecornu as Prime Minister Amid Budget Crisis and Political Turmoil
Vatican hosts first Catholic LGBTQ pilgrimage
Apple Unveils iPhone 17 Series, iPhone Air, Apple Watch 11 and More at 'Awe Dropping' Event
France joins Eurozone’s ‘periphery’ as turmoil deepens, say investors
France Faces New Political Crisis, again, as Prime Minister Bayrou Pushed Out
Nayib Bukele Points Out Belgian Hypocrisy as Brussels Considers Sending Army into the Streets
France, at an Impasse, Heads Toward Another Government Collapse
×