MBC raises $390m with oversubscribed IPO

USA Today Sports

• Oversubscribed by 17.6%
• Raised SAR1.46bn
• Proceeds to pay debt and invest

Saudi media company MBC Group’s IPO on the Saudi stock exchange was 17.6 times oversubscribed, raising SAR1.46 billion ($390 million). 

A minimum of nine shares were allocated to each subscriber and the remaining shares were distributed pro rata, according to a statement on stock market website Tadawul by lead manager and advisor HSBC Saudi Arabia, along with bookrunner and underwriters JP Morgan Saudi Arabia and SNB Capital. 

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“Each investor received an additional allocation of one share in a descending order starting with the highest demand until such shares were totally exhausted,” the statement said. 

The MBC IPO began on December 14 and ended on December 18 for 10 percent of share capital, offering 3.325 million shares at SAR13.50 per share. It was open to Saudi nationals, foreign residents and GCC nationals. 

The pan-Arab broadcaster, which is moving its headquarters from Dubai to Riyadh, says the net proceeds will be used to repay outstanding loans, boost working capital, content development for its video streaming platform Shahid and investment in new initiatives. 

Established more than 30 years ago, MBC is one of the largest media and entertainment companies in the Middle East and North Africa. Its content reaches 150 million people every week. 

The company is split between finance ministry-owned Al Istedamah Holding with a 60 percent stake and founder and chairman Waleed Al Ibrahim, who owns the remaining 40 percent. 

Listings on Mena stock markets slowed during the third quarter, but analysts remain upbeat for 2024 despite concerns over the Israel-Gaza conflict. 

There were six IPOs in the third quarter of 2023, raising $523 million in total. This was a 14 percent drop in volume and a 66 percent slump in proceeds compared to a year earlier. Five out of six in the third quarter were in Saudi Arabia.

There have been 29 IPOs so far this year in the region, according to Ernst & Young’s Mena IPO Eye. Total proceeds stand at $5.8 billion, down 6 percent in volume and 61 percent in funds raised year on year.