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Saudi Aramco is expected to price its initial public offering Thursday at the high end of the targeted range to give the oil giant a total value of $1.7 trillion in what would be the world’s biggest-ever IPO, according to people familiar with the matter.
The state-controlled Saudi Arabian Oil Co., commonly known as Aramco, is set to sell 3 billion shares or 1.5% stake of the company at 32 Saudi riyals ($8.53), or at the top of the targeted range of 30 to 32 riyals for a total of $25.6 billion. That would exceed the $25 billion IPO in 2014 of Chinese online commerce company Alibaba Group Holding Ltd., the current record holder.
Still, the share sale falls well short of the initial $2 trillion valuation targeted by Saudi Crown Prince Mohammed bin Salman. The shortfall also risks over exposing Saudi Arabia’s middle-class investors to the future stock-market performance of one company, as many institutional investors outside the country and the surrounding region passed on the offering as too expensive, according to people involved in the IPO process.
