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Merrill Lynch Kingdom of Saudi Arabia, the stabilizing manager of Saudi Aramco’s secondary offering, stated that it may stabilize the oil giant’s share sale as per the instructions on the price stabilization mechanism in initial public offerings, according to a Tadawul statement.
The stabilization period is expected to run on June 9 and end on July 9, 2024.
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The overallotment shares reach 154.5 million by the Saudi government, the overallotment shareholder.
The overallotment shares represent 10% of the total offered shares, the statement said, adding that the offer price is SAR 27.25 a share.
This option may be exercised in full or in part at any time during the stabilization period.
According to data available with Argaam, in order to allow the stabilizing manager to cover short positions resulting from any overallotments, the government granted the stabilizing manager a greenshoe option, which allows the stabilizing manager to purchase from the government up to 10% of the offer shares, at the final offer price.
The overallotment option will be exercisable in whole or in part upon notice by the stabilizing manager, within 30 calendar days after the commencement of trading of the offer shares on the Saudi Exchange (Tadawul), which is expected to be Sunday, June 9, 2024. Assuming the exercise of the over-allotment option in full, the offering will comprise approximately 0.7% of the company’s issued shares.
The final share price was set at SAR 27.25 a share.
A minimum of 10 shares were allocated for each subscriber, and the remaining shares will be allocated pro rate, with an average allocation of 25.13%.
The number of individual investors reached 1.33 million; hence, 10% of the total offer shares were allocated to individuals, excluding the shares issued under the overallotment option. Meanwhile, the remaining 90% was allocated to participating parties.
Saudi Aramco earlier announced a plan to offer 1.54 billion shares on the Main Market (TASI), representing 0.64% of the company’s issued capital. The book-building ended on June 6, and retail offering ended on June 5.
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