Investors cover Aramco secondary offering within hours: Aramco’s blockbuster follow-on offering was fully covered “hours” after kicking off yesterday, Bloomberg reports, citing a document it saw. The oil giant’s offering attracted demand “on the full [transaction size] within the price range,” Reuters reports, citing one of the banks working on the offering. Aramco had set a price range of SAR 26.70-29.09, meaning it could raise as much as SAR 43.5 bn.

Institutional book-building continues through Thursday, and foreign appetite could be significant. Both local and foreign investors subscribed to the offering, Bloomberg reports, citing three people with knowledge of the transaction. It remains unclear “how much of the demand came from overseas,” the business information service said. The offering is Regulation S compliant, making it easier for global institutional investors to take part, according to the prospectus (pdf).

What’s next: The final allocation of shares and the offering’s final price will both be announced on Friday, 7 June, the oil giant said (pdf). Trading of newly sold shares will begin next Sunday, 9 June. Excess subscription amounts will be returned on Tuesday, 11 June.

The pitch: Buyers can expect part of a USD 124 bn dividend, which Bloomberg Intelligence expects will amount to a dividend yield of 6.6%. Aramco is set to boost its dividend this year by as much as 30% over 2023 thanks to a performance-based dividend, despite a 14.4% y-o-y dip in net income in 1Q 2024 to SAR 102.3 bn on lower crude oil sales.

BACKGROUND- The government is taking an additional 0.64% stake to market, or 1.5 bn ordinary shares, Aramco said in a statement on Thursday. The institutional tranche of the sale will account for at least 90% of the shares on offer, while no more than 10% will be allocated to retail investors for the transaction. The three-day subscription period for retail investors starts today and wraps this Wednesday, 5 June, for a minimum of 10 shares each with no upper limit.

ADVISORS- SNB Capital is lead manager. HSBC, BofA, Citi, Goldman Sachs, JP Morgan, Morgan Stanley, Meryll Lynch, and SNB Capital will act as joint global coordinators, bookrunners and financial advisors. Our friends at EFG Hermes KSA will act as domestic bookrunners alongside Al Rajhi Capital, Riyad Capital, and Saudi Fransi Capital. Meanwhile, M. Klein and Company and Moelis will act as independent financial advisors. Meryll Lynch will act as the stabilization manager. White & Case is legal counsel to Aramco, while PwC is auditor. Receiving agents include, Alinma Bank, Alrajhi Banking and Investment Corporation, Arab National Bank, Banque Saudi Fransi, Riyad Bank, Saudi Awwal Bank, Saudi National Bank.

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