Saudi Arabia’s MBC Group gets $14.5bn orders for IPO

Saudi broadcaster MBC Group (MBC) has attracted $14.5bn (SAR54.5bn) in investor orders for its initial public offering (IPO) on the Saudi Exchange (Tadawul).

MBC priced its IPO at the top of the previously announced range, selling its shares at SAR25 to raise SAR831m amid strong investor demand, which saw the offering oversubscribed by 66 times.

The strong investor demand shows that the appetite for listings in the Middle East remains healthy even as IPOs elsewhere struggle to gain traction.

“The response highlights investors’ recognition of our strong brand, expansive reach, diverse and high-quality content portfolio, as well as the significant potential for growth which is underpinned by Shahid,” said Sam Barnett, CEO of MBC Group.

The pricing of SAR25 per share implies a market valuation of around SAR8.3bn at listing. The broadcaster is offering 33.3 million shares, equivalent to 10 per cent of the broadcaster’s total issued share capital.

Upon listing, MBC’s current shareholders, Al Istedamah Holding and Waleed Ibrahim Al Ibrahim, will collectively own a 90 per cent stake in the company. The company’s expected trading debut on Tadawul is likely to be in 2024.

The broadcaster plans to use the IPO proceeds to repay debt, enhance its financial flexibility and invest in new content for Shahid and other initiatives.

Founded in London in 1991, MBC is one of the biggest media and entertainment companies in the MENA region, and its content reaches more than 150 million people each week.

The broadcasting group moved its headquarters to Dubai in the UAE in 2002, and then to Saudi Arabia’s capital Riyadh.

The company’s main business segments include TV broadcasting, Shahid – a MENA video streaming platform, and MBC Studios – which includes drama series and movie production and several other media-related ventures.

MBC reported revenues of SAR3.49bn ($930m) in 2022, registering a 23 per cent CAGR for the period between 2020 and 2022. While Shahid’s contributions to its revenues have been increasing, the platform has yet to turn a profit.

The company said HSBC Holdings, JPMorgan Chase and SNB Capital are financial advisers, book-runners and underwriters for the deal, while GIB Capital is a financial adviser to the major shareholders.

MBC Group joins MENA IPO frenzy

Meanwhile, as much as $8.4bn has been raised through IPOs in the Middle East this year, down 54 per cent compared to a year ago, according to Bloomberg.

However, the region’s listing activity is in contrast to a gloomier picture in other markets such as Asia and Europe.

Earlier in November, EY said MENA capital markets saw six IPOs raising $523m in proceeds, a 14 per cent decrease in the number of IPOs and a 66 per cent decrease in proceeds compared with the same period in 2022.

Despite the lower levels of proceeds from MENA IPOs year-on-year, EY said the overall sentiment remains positive from an IPO pipeline standpoint. Dubai Taxi Company received more than Dhs150bn ($41bn) in investor orders for its $315m IPO.

The GCC region’s biggest taxi operator by market share is offering 624.8 million shares, which will be listed on the Dubai Financial Market in December.

Furthermore, Abu Dhabi’s PureHealth – MENA’s biggest healthcare platform announced plans to list and crypto mining hardware retailer Phoenix Group Plc said its $371m IPO was about 33 times oversubscribed.

Read: UAE’s Purehealth seeks to raise Dhs3.62bn from IPO