Saudi Aramco Sets Final Price for Secondary Offering at 27.25 Riyals per Share
As announced a few days ago, global giant Saudi Aramco has set the final price for its secondary offering at 27.25 riyals per share, based on the order book from institutional investors. Trading of the shares will begin on Sunday, June 9, 2024.
Individual Subscribers Fully Subscribed
The shares allocated to individual subscribers have been fully subscribed, with 1.3 million individual subscribers. As a result, 10% of the offer shares (excluding shares issued under the over-allotment option) will be allocated to individual subscribers, and the remaining 90% of the offer shares will be allocated to institutional subscribers. Each individual subscriber will receive a minimum of 10 shares, and the remaining shares will be allocated pro-rata, with an average allocation of 25.13%.
Over-Allotment Option
To enable the Price Stability Manager to cover short sales resulting from any additional allocation of shares, the Saudi government has granted an over-allotment option, allowing it to purchase up to 10% of the offer shares from the government at the final price.
Refund of Excess Subscription Funds
Excess subscription funds will be refunded to individual subscribers, equivalent to the difference between the price at which individual subscribers subscribed (29 riyals per share) and the final offer price (27.25 riyals per share), plus any excess amount from unallocated shares, if applicable, on Tuesday, June 11, 2024.
Successful Operation
Although the valuation is on the lower end of the range (between 26.7 and 29 riyals), the Saudi government has managed to raise $11.2 billion by selling just 0.64% of the company's capital. A successful operation indeed.
