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HomeBanking & FinanceJP Morgan, HSBC eye $4b Saudi IPO

JP Morgan, HSBC eye $4b Saudi IPO

saudi_landscapeJPMorgan Chase & Co. and HSBC Holdings  are among banks planning to compete for a role in the largest Saudi Arabian share sale in at least 12 years, according to five people with knowledge of the matter.

The banks will vie with local lenders including Banque Saudi Fransi (BSFR) and Gulf International Bank to be appointed as financial adviser on the sale of a 15 percent stake in Jeddah-based National Commercial Bank, the people said, asking not to be named as the information isn’t public. NCB, as the lender is known, sent out a request for proposals to banks to manage the initial public offering earlier this week, the people said.

The first Saudi bank IPO since 2008 could raise about 16 billion riyals ($4.3 billion) based on NCB’s profits and trading values of other Saudi banks, according to Asim Bukhtiar, head of research at Riyad Capital, the investment-banking unit of Riyad bank. That would surpass the 15 billion-riyal offering by Saudi Telecom Co in 2002, according to data compiled by Bloomberg.

Saudi Arabia’s Public Investment Fund is selling part of its 69 percent holding in NCB, bank chairman Mansoor Al Maiman said Feb. 27.

A request for proposals “was sent to a selected number of authorized persons to act as the financial advisor for the IPO process as per CMA requirements,” NCB said in an e-mailed statement today, referring to the Saudi financial market regulator. “Once the selection is made, the selected financial advisor will be announced.”

Saudi Arabia’s stock market is the Gulf’s largest, with a market value of about $506 billion.

A spokeswoman for JPMorgan declined to comment, as did spokesmen at HSBC and Saudi Fransi. A spokeswoman for GIB didn’t immediately respond to calls seeking comment.-Bloomberg