Saudi Aramco’s advisers have recommended London for the historic listing of the oil company, sources familiar with the matter told Reuters in an exclusive report.
The report said U.S. disclosure rules were a concern for Saudi authorities.
London’s Financial Conduct Authority (FCA) has proposed a rule change that would allow state-owned companies, such as Saudi Aramco, to apply for a special category of premium listing with less onerous disclosure and regulatory requirements. The move to do so drew criticism from the British press, but may have tipped the scales in London’s favor over the United States.
“The City’s strict rules currently block a premium listing unless at least 25pc of the stock is sold,” the UK-based Telegraph notes. “It is understood firms going down the proposed route would not have to disclose transactions with their sovereign owner, while shareholders would not be able to vote in or out independent board members.”
“This was a clear sign that London is ready to welcome Aramco and needs its IPO to attract more sovereign-held entities and prove that London remains a good place to do business after the country leaves the European Union,” one of the sources told Reuters.
A big payday awaits any advisers on the deal.
According to Reuters, a final decision on the venue for what is expected to be the world’s biggest IPO and is targeted to raise $100 billion (76.38 billion pounds) will be taken by Crown Prince Mohammad bin Salman.
The IPO is a cornerstone of Saudi Arabia’s Vision 2030 economic and social reform plan.