MBC has hired our friends at HSBC alongside JP Morgan and SNB Capital for what pundits are tipping as one of the year’s largest and most visible IPOs. The company made the announcement yesterday after receiving regulatory clearance from the Capital Market Authority (CMA) to go ahead with the transaction. The prospectus for the offering of 10% of the company’s total shares on Tadawul has yet to be released, the CMA said in a brief statement.

MBC is explicitly courting global and regional institutions with the offering. The institutional tranche of the sale will account for at least 90% of shares on offer, while no more than 10% will be allocated to individual investors. The offering will be Regulation S compliant (ie: pass muster with the US Securities and Exchange Commission), making it easier for global institutional investors to consider taking a stake.

The broadcaster has up to six months to pull the trigger on the sale, the regulator said.

MBC is pitching itself as a long-term growth story, its IPO microsite suggests.

The company is one of the region’s oldest and largest broadcasters and has done a good job of managing the switch from satellite to streaming with the launch of its Shahid streaming service, which claims the largest audience of any of what the industry calls “over-the-top” or “OTT” services in MENA. The group draws c. 150 mn viewers a week on satellite, while Shahid has 22 mn peak active users during Ramadan and is building it an audience in the Australia and the United States. MBC runs 13 channels (from news to entertainment) and has a library of some 9.2k proprietary titles.

In numbers, MBC claims:

  • An EBITDA margin of just over 10% last year, with EBITDA of SAR 377 mn on revenues of SAR 3.49 bn. It says that margin is industry-leading — and that it would have turned in an EBITDA margin of >20% if it wasn’t investing in fast-growing Shahid;
  • A 40% share of audience in KSA, which it says makes it 2.5x larger than its nearest competitor;
  • #1 positions in Egypt, Iraq, and Morocco, though it stops short of specifying the size of its audience in those countries.

How does it plan to grow? Streaming, streaming, streaming. MBC is highlighting its fast-growing paid-subscription streaming business (where it also sees substantial advertising prospects) — and is talking up “gaming, music and events” as important future revenue streams.

Who owns MBC? The state’s Al Istedamah has 60%, while founder and chairman Waleed Al Ibrahim holds the balance.

Who’s selling? The company’s intention to float (pdf) does not make clear which of the two parties is offering how many shares for sale, but CEO Sam Barnett said Al Ibrahim is “actively engaged” in the business and is “not selling.”

Global media coverage: The announcement is getting ink from Bloomberg and Reuters, in addition to wide coverage in regional media.

ADVISORS- HSBC, JP Morgan, and SNB Capital are on board as joint financial advisors as well as joint bookrunners and underwriters. GIB Capital is serving as financial advisor to substantial shareholders. Arab National Bank, Banque Saudi Fransi, Riyad Bank and Saudi National Bank have been named receiving banks, while Brunswick is running media.

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