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RIYADH - A share offering by Prince Alwaleed bin Talal's Kingdom Holding attracted more than double the amount the billionaire wanted as over 1 million Saudis ignored Islamic religious edicts against the sale.
Saudi retail investors and institutional investors offered 8.53 billion riyals ($2.9 billion) for the 5 per cent stake in Kingdom Holding.
More than 1.25 million Saudis applied to buy shares in the initial public offering of 315 million existing shares at 10.25 riyals each, valuing the company at US$17.2 billion ($21.5 billion).
Some clerics had issued edicts to discourage investors from buying shares in Kingdom, saying the company's investments in hotels and banks violated Islam's ban on usury and alcohol.
Similar denunciations have had little impact on previous Saudi IPOs.
"The response has been strong," Prince Alwaleed said. The nephew of King Abdullah was looking to raise 3.23 billion riyals in the offering.
The statement did not provide details on the demand for the retail tranche of the IPO. Half the total offering was to retail investors and the other half to institutional investors.
Kingdom's IPO was priced at around 67 times 2006 earnings, more than four times the average for the Saudi bourse, on which it will be the fifth-largest stock.
Alwaleed's stake in Kingdom, which had US$24 billion in assets at the end of 2006, will fall to 93.5 per cent after the sale. His son and daughter are also shareholders.
The Kingdom offering attracted a smaller number of investors than other recent IPOs have done, however.
More than 1.3 million Saudis bought shares in Printing and Packaging Co's US$105.6 million listing, which closed 36.4 per cent oversubscribed this month.
A US$537 million IPO in June by Jabal Omar Development, which is developing property projects near holy shrines in Mecca, attracted more than 6.2 million Saudis, who offered two times more cash than the firm was seeking.
Alwaleed has made billions of dollars by investing in underperforming companies and is the world's 13th-richest person, according to Forbes magazine.
- REUTERS
