In a significant development for the Saudi media landscape, MBC Group, a leading media giant, has announced its intention to proceed with an initial public offering (IPO) in the coming months. Chief Executive Sam Barnett confirmed the decision, revealing that the company plans to float 10% of its share capital on the Saudi Exchange. This move not only marks a pivotal moment for MBC but also aligns with broader initiatives aimed at deepening capital markets, fostering private sector growth, and attracting investment within the Kingdom.
MBC's IPO announcement follows the approval by the Kingdom's Capital Market Authority (CMA), signifying a crucial step toward the realization of this strategic move. While the specific timing remains uncertain, Barnett anticipates that the process will unfold over the coming weeks, with the IPO likely taking place in the coming months.
The CMA approval, valid for six months, underscores regulatory support for MBC's initiative, reflecting confidence in the potential success of the IPO. Barnett acknowledged that the share price would evolve during the book-building process, emphasizing transparency and adherence to regulatory protocols.
Currently, MBC is structured with a 60% stake held by state-owned Al Istedamah Holding and the remaining 40% owned by MBC founder and chairman Waleed bin Ibrahim Al Ibrahim. Barnett clarified that neither shareholder intends to sell any shares during the IPO; instead, the funds raised will be reinvested into the company.
Utilizing IPO Proceeds:
The IPO proceeds are earmarked for strategic purposes, including the repayment of outstanding debt, enhancing liquidity, and supporting investment in MBC's online streaming platform, Shahid, along with other new initiatives. This forward-looking approach reflects MBC's commitment to innovation and adaptation in an evolving media landscape.
Barnett shared that MBC has attracted interest from both foreign institutional investors and local investors. The uniqueness of MBC's offering, coupled with its prominent position in the regional media landscape, has positioned the IPO as an appealing investment opportunity.
Broader Context of Saudi IPOs:
MBC's IPO announcement aligns with a broader trend of Saudi Arabian companies going public in recent years. This strategy is part of a comprehensive plan to deepen capital markets, stimulate private sector growth, and attract domestic and international investment. MBC's decision to join this wave of IPOs underlines the resilience and attractiveness of the Saudi market.
MBC Group's decision to pursue an IPO represents a landmark moment for the Saudi media industry. As the company takes steps towards becoming a publicly traded entity, it not only opens up new avenues for investment but also underscores the dynamism and growth potential of the Kingdom's media sector. The IPO's success would not only benefit MBC but also contribute to the broader vision of transforming Saudi Arabia into a regional hub for innovation, media, and economic diversification. As the IPO unfolds in the coming months, all eyes will be on MBC as it charts a new course in the evolving landscape of Saudi Arabian media and entertainment.