MBC shares rocket on stock market debut

Middle East broadcast outfit MBC Group has debuted on the Saudi Arabian stock exchange, with its shares rising some 30% above the listing price in initial trading.

MBC had earlier raised SAR831 million (US$221 million) from the IPO of 10% of its share capital. Shares were trading at SAR32.5 as the market opened, against an offer price of SAR25.

MBC had priced its share at the top of the previously announced range when it initiated the IPO process late last year.

Some 90% of the offer shares were allocated to institutional investors, with the remaining 10% open to individuals. The institutional book-building process gave it an order book that was oversubscribed 66 times.

MBC said in December that it had concluded a highly successful book building exercise, drawing support from Saudi Arabian, regional and international investors, giving it an order books of SAR54.5 billion. It had aimed from the SAR25 price per share to achieve a market cap of SAR8.3 billion, or around US$2.2 billion.

CEO Sam Barnett said at the time that “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”, referring to MBC’s streamer, in which it is placing hopes for success as it transition to digital.

Sam Barnett (Source: MBC)

In a note published at the end of last year, Omdia senior analyst Daoud Jackson said that “one key aspect of the success of the Arab-speaking world’s largest platform, Shahid VIP, is that the transition to subscription video can be made at several entry points from a broadcaster video platform with extensive use of free episodes”.

MBC was advised by local investment bank SNB Capital, which said that the retail tranche of the IPO had been oversubscribed 17 times.

“SNB Capital is pleased to have advised MBC Group on this iconic IPO which comes at a time when interest in the Saudi market has never been higher,” said Zaid Ghoul, Managing Director and Head of Investment Banking at SNB Capital.

“The economic drive and the growth of the Kingdom is leading to strong interest as national and international investors look to increase their exposure to the Saudi equity capital market.”