Saudi Telecom Said to Weigh IPO for Internet-Services Unit
Saudi Telecom Is Weighing an IPO for Its Internet-Services Unit
(Bloomberg) -- Saudi Telecom Co. plans to spin off its internet-services unit through an initial public offering on the local stock exchange late next year, in a listing that could value the business at about 10 billion riyals ($2.7 billion), according to people familiar with the matter.
Saudi Telecom is considering selling as much as 30% of the unit, Solutions by STC, although no final decisions have been made and the company may still decide against selling shares, the people said, asking not to be identified because the information is private. The final valuation could be higher depending on how much profit it makes over the rest of this year and investor demand for the shares.
The company has already started talks with local and international investment banks, but has yet to appoint a financial adviser, the people said. STC shares rose as much as 3.4% and were trading at 102 riyals at 3 p.m. in Riyadh.
While Saudi Telecom doesn’t break out the financial performance of its subsidiaries, the Riyadh-based company did say that Solutions by STC was one of the two key drivers for a 10% increase in revenue for the second quarter, along with its sales and distribution arm, STC Channels.
Saudi Telecom and Solutions by STC didn’t respond to emailed requests for comment.
The potential listing comes as businesses from grocery stores to car rental companies look to sell shares on the Saudi stock market, buoyed by a surge in demand that has led to one recent offering being 83 times oversubscribed. The Tadawul All Share Index, which is poised to be the first benchmark in the Gulf to erase 2020 losses, was up just under 1% on Tuesday.
The Saudi telecoms firm is also continuing talks to buy Vodafone Group Plc’s stake in Vodafone Egypt, even though a deadline to finalize terms lapsed this week. Saudi Telecom had offered $2.39 billion for Vodafone’s 55% stake in the Egyptian carrier in January.
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