Saudi PIF’s 10% stake sale in Tadawul Group priced at $51 as offering oversubscribed

RIYADH: Saudi Arabia’s Public Investment Fund’s book-building for the sale of a 10 percent stake in Tadawul Group has been concluded, with the final offer price set at SR191 ($51) per share, according to a bourse filing.

From the book-building offering, the sovereign wealth fund raised SR2.29 billion through the sale of the 10-percent stake in the stock exchange, Bloomberg reported.

The offering, which took place on Nov. 11, was successfully oversubscribed by both local and international institutional investors.

The final price for the offering represents a discount of 8.9 percent to the closing share price on Thursday, Nov. 10, 2022, the last trading day before the offering, according to the offering documents.

The PIF, which has over $600 billion in assets, offered 12 million shares in Tadawul Group, the document added.

The offering is in line with the PIF’s strategy of recycling its capital in order to invest in emerging and promising sectors of the local economy, according to a statement.

“The strong interest generated from domestic and international investors is indicative of Saudi Tadawul Group Holding Co.’s ability to attract a broad base of investors as one of the leading companies listed on the Saudi Exchange,” PIF’s Head of Investment Advisory in the MENA Investments Division, Eyas AlDossari, said.

He noted that the deal enhances both local and international investors’ liquidity by increasing the company’s free float shares and is expected to benefit both Saudi investors and shareholders of Tadawul Group.

“The success of this transaction is a testament to the attractiveness of the Saudi capital market and demonstrates investors’ confidence in the strength of the Saudi economy,” AlDossari added.

Once the offering is finalized, the PIF’s ownership will amount to 60 percent of the company’s share capital.

The remaining ordinary, held by the PIF in Saudi Tadawul Group, will be subject to a 90-day lockup.

The offering will not generate any proceeds for the company and will not dilute the shares of its other shareholders.

The sale was to be conducted through off-market negotiated deals before the opening of the market on Sunday, Nov. 13.

The sovereign wealth fund has hired both HSBC Saudi Arabia and Morgan Stanley Saudi Arabia to act as joint global coordinators, as well as Al Rajhi Capital to act as joint book-runner.

Last year, the PIF sold a 30 percent stake in Tadawul in a $1 billion initial public offering, and since then, its shares have doubled.

The PIF, led by Crown Prince Mohammed bin Salman, invested SR84 billion locally in 2021 and is planning to invest another SR150 billion in 2022.

The fund has investments in companies spanning a wide range of industries, such as Saudi Electricity and utility firm Acwa Power.

It owns majority stakes in the $53 billion Saudi Arabian Mining and $54 billion Saudi Telecom, as well as Saudi National Bank, Riyad Bank and Alinma.