JP Morgan Chase is close to winning the lead advisory role for the initial public offering of Saudi Aramco, the world's most profitable corporation, edging out rivals for the what is likely to be the world's biggest IPO.
It will also likely add Citi, Goldman Sachs, HSBC and Samba Financial Bank to the list of banks managing the transaction, a first phase of which could take place locally before the end of this year, sources told Reuters.
The "tentative plan", a source added, is to first list domestically before doing so internationally in 2020. The oil giant's projected value is from $1.5trn to as high as $2trn, as per Saudi Crown PrinceMohammed Bin Salman's (MBS) estimate. It reportedly first formally invited banks to submit IPO proposals last month.
The IPO was initially slated for last year to raise $100bn by selling a 5% stake with the aim of reinvesting in non-oil sectors. It was subsequently delayed by MBS to pursue a $69bn acquisition of a local chemicals firm.
Now, encouraged by the strong reception to a $12bn bond offering in April, MBS is keen to push ahead with a listing as early as November, according to sources.
That is several months ahead of earlier reports that they sought to list in 2020 or 2021. The tentative plan is first to list on the domestic Saudi exchange this year, selling perhaps $25bn worth of shares, then to sell stock in London or New York next year.
CNBC reported on Sunday that Morgan Stanley had competed with JPMorgan, but its chances were hurt by its work leading the IPO of Uber as Saudi officials were not pleased with Morgan Stanley bankers misjudging demand.