Saudi media company MBC Group to float 10% in IPO 

MBC Group

Saudi media major MBC Group plans to launch an initial public offering (IPO) on the Saudi Exchange (Tadawul).

The announcement comes after the Capital Market Authority (CMA) approved the company’s plan to offer 33.25 million ordinary shares, representing 10 percent of its share capital.

The offering price will be determined at the end of the book-building period.

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The net proceeds will be used to repay outstanding loans, boost working capital, expenditure on content development for the video streaming platform “Shahid” and investment in new initiatives.

The shares will be offered for subscription to individual and institutional investors, including institutional investors outside the United States.

State-owned Al Istedamah Holding owns a 60 percent stake, while Waleed Al Ibrahim holds the remaining 40 percent. Following the IPO, the current shareholders will collectively own 90 percent of the company’s share capital.

Established over 30 years ago, MBC is one the largest media and entertainment companies in the Middle East and North Africa region, with its content reaching over 150 million people every week. 

Group revenues reached SAR3.49 billion ($930 million) in 2022, registering a 23 percent compound annual growth rate (CAGR) between 2020 and 2022, with strong growth continuing into the first six months of 2023. 

Revenue has been driven by the expansion of Shahid, representing a CAGR of 59 percent over the last three years and a growing subscriber base by 3.8 times since 2020.

“Through the IPO, we aim to further grow our market position and audience reach, continue investing in our popular streaming platform, Shahid, and expand into promising entertainment verticals,” Waleed Al Ibrahim, chairman, MBC Group, said.

Speaking to Reuters, CEO Sam Barnett said that the company will launch the IPO in the coming months.

“We are not entirely sure on the timing of it. I understand the process will roll out over the coming weeks, but I expect it to be in the coming months,” he added.

MBC has appointed HSBC Saudi Arabia, JP Morgan Saudi Arabia and SNB Capital as joint financial advisors, joint bookrunners, and underwriters. In addition, HSBC Saudi Arabia has been named as lead manager.

GIB Capital is acting as the financial advisor to the substantial shareholders. 

Arab National Bank, Banque Saudi Fransi Riyad Bank and Saudi National Bank have been appointed as receiving agents for retail investors.

The MBC announcement comes as the number of listings on Middle East and North African stock markets slowed during the third quarter. 

There were six IPOs during the period, raising $523 million in total. This is a 14 percent drop in volume and a 66 percent slump in proceeds compared to a year earlier.

There have been 29 IPOs in the first three quarters of this year, according to EY’s Mena IPO Eye Q3 report. Total proceeds stand at $5.8 billion. This is down 6 percent in volume and 61 percent in funds raised year on year. All the listings are in the GCC.