Saudi Arabia’s PIF to sell 2% stake in STC in estimated $1bn deal

Saudi Arabia’s Public Investment Fund is selling 2 per cent of its stake, or 100 million shares, in Saudi Telecom Company, the kingdom’s biggest mobile operator, according to a regulatory filing with the Tadawul stock exchange.
The stake is estimated to be worth more than $1 billion, based on STC’s most recent closing price. Still PIF will remain STC’s largest shareholder following the sale, with almost 62 per cent holding. STC, which offers digital products and services across the Middle East and North Africa region, will not receive any proceeds from the sale, the statement said.
STC’s shares have jumped more than 4.4 per cent since the start of the year. They closed 0.4 per cent down to 41.1 Saudi riyals ($10.94) a share on Wednesday.
Riyadh-based sovereign wealth fund PIF, with more than $930 billion of assets under management, plans to sell its stake through an Accelerated Bookbuild Offering (ABO) aimed at institutional – large investor – buyers.
Unlike traditional offerings, an ABO is completed in a short time frame – usually within a single trading day – allowing the seller to raise capital or offload shares quickly without disrupting the market over a longer period.
The Saudi exchange will have a special pre-market session before the regular market opening on Thursday specifically for large, negotiated deals involving STC shares, according to the statement posted on Tadawul.
The pre-market session will allow certain investors to place big trades for STC shares in bulk before the regular trading hours begin. Regular market will be unaffected as the usual market schedule for other stocks won’t change, and trading for all securities will start as usual.
Any deals made during the pre-market session for STC will be listed on the Saudi exchange’s website for transparency, the statement added.
The PIF, which raised $3.2 billion by offloading a 6 per cent stake in STC in December 2021, has hired Saudi National Bank and Goldman Sachs to complete the share sale in STC.
The fund is a central plank of the kingdom’s Vision 2030 initiative that seeks to diversify the Arab world’s largest economy and reduce its reliance on oil.
Last month, its governor Yasir Al Rumayyan said the sovereign wealth fund plans to slash its foreign portfolio by about a third and focus more on domestic markets as it looks to establish the kingdom as the global hub of artificial intelligence.
In August, the PIF said its assets under management jumped 29 per cent to 2.87 trillion Saudi riyals ($765 billion) in 2023 as it solidified its Saudi holdings and diversified its international portfolio of assets.
The annualised returns for the sovereign fund since 2017 rose to 8.7 per cent in 2023, up from 8 per cent a year earlier, the fund said in its annual report.