Aramco retail investors to get a minimum of 10 shares

Reuters/Ahmed Jadallah

The retail tranche of Saudi Aramco’s secondary share offering has been fully subscribed.

The retail offering received a total of 1.33 million subscribers at the final offer price of SAR27.25 ($7.27).

A minimum of 10 shares will be allocated to each subscriber, with the remaining shares to be allocated on a pro-rata basis with an average allocation factor of about 25.13 percent, the company said in a statement.

Based on the book-building process results, the final price of SAR27.25 is applicable to both institutional and retail investors, with the energy giant raising nearly $11.2 billion from the offering.

The world’s largest oil producer is selling a 0.64 percent stake, or 1.545 billion shares, via the secondary offering. Nearly 154.5 million shares have been allocated to retail investors.

Aramco is expected to allocate nearly 60 percent of its offer shares to foreign investors, Bloomberg reported on Saturday, citing sources.

The deal generated strong demand from the US and Europe, as well as funds from the UK, Hong Kong, and Japan, as orders reached more than $65 billion, the report said.

Negotiated deals

While Aramco did not provide details on the institutional tranche, SNB Capital, the lead manager of the offering, said on Thursday that the Saudi Exchange (Tadawul) will facilitate an opening auction for only negotiated deals on the institutional tranche of Aramco.

A negotiated deal is an off-order book transaction between the buyer and seller before being finalised on the the stock exchange.

Stabilising share price

In addition, Merrill Lynch Saudi Arabia, the stabilising manager for the offering, announced plans to stabilise the share sale by purchasing up to 155 million shares from the government using the “greenshoe” or over-allotment option.

The offer price will remain at SAR27.25, with the stabilisation period expected to run for a month starting June 9.