Sustainability Holding Company will sell its entire stake in MBC Group to Saudi Arabia’s Public Investment Fund, according to a disclosure on the Saudi Stock Exchange.
MBC indicated today, Sunday, that it had received a notification from the Sustainability Company - owned by the Saudi Ministry of Finance - regarding its conclusion of a binding share sale and purchase agreement to sell its entire stake in the media group, amounting to 179.5 million shares, representing 54% of the company’s total capital, to the fund through a private deal, with a total value of 7.4 billion riyals (about two billion dollars) for the selling shares, i.e. at a price equivalent to 41.6 Saudi riyals per share, which is the closing price for last week’s trading.
MBC's disclosure, which noted that the completion of the deal is subject to the approvals of the relevant authorities, did not indicate how the deal's value would be paid or the mechanisms for financing it.
MBC shares jumped about 10% to 45.75 riyals in early trading today amid news of the acquisition deal. Its price has increased by more than 80% since listing on Jan. 8.
MBC Group’s full-year profit rose 44.8% to 69 million riyals ($13.7 million) in the year to end, beating analysts tracked by Bloomberg’s consensus forecast of 38.9 million riyals in losses. MBC said at the time that a 110 million riyal drop in net losses at its on-demand video platform Shahid contributed to the profit growth.
In December of last year, MBC offered 33.25 million shares, representing 10% of the company’s capital, in an initial public offering on the Saudi stock market, at a price of 25 riyals per share.
Ministry and Fund deals
The MBC deal is the second between the Ministry of Finance and the Public Investment Fund in less than two months, as they signed an agreement in September to transfer the entire remaining loan owed to the ministry by Emaar, The Economic City, amounting to approximately 2.9 billion riyals, to the fund. This was preceded by the latter’s acquisition in September 2021 of a 25% stake in Emaar, The Economic City, after transferring part of the loan the company obtained from the Ministry of Finance worth 2.8 billion riyals to the fund in exchange for issuing new shares in the company.
A newspaper report in February revealed that the Saudi sovereign fund was seeking to acquire all or part of the finance ministry’s 36% stake in the Binladin Group. But in July, the ministry said it planned to support the kingdom’s largest construction group through a range of measures, including lending it and considering increasing the government’s stake in it. It did not comment on the possibility of transferring ownership of the stake to the fund at a later date.
