Banks are expected to recommend a lower valuation than the $2 trillion that Saudi Arabia Crown Prince Mohammed bin Salman wanted for Saudi Arabian Oil Co., or Aramco, in preparation for its IPO, The Wall Street Journal reported Oct. 10, citing unnamed sources.
Company executives suggest that $1.5 trillion is more realistic, the Journal said.
The lower valuation received support from the underwriters, including JPMorgan Chase & Co., Goldman Sachs Group Inc. and Morgan Stanley, according to the report. The oil giant's investment bankers may deliver their recommendations on the valuation as early as Oct. 11.
In the first phase of the IPO, Aramco is aiming to sell a 1% to 2% stake on the domestic Tadawul exchange before the U.S. Thanksgiving holiday Nov. 28, the report added. The company had said it planned to increase the targeted stake for sale from 5% to 10%.
