Saudi Aramco Advisers Favor London for Historic IPO

Saudi Aramco's advisers have recommended London for the historic listing of the oil company, with U.S. disclosure rules a concern for Saudi authorities, sources familiar with the matter told Reuters.

A final decision on the venue for what is expected to be the world's biggest IPO and is targeted to raise $100 billion will be taken by Crown Prince Mohammad bin Salman, who is overseeing Saudi Arabia's radical economic reforms, they said.

Listing five percent of Aramco is a centerpiece of Saudi Arabia's Vision 2030 plan to diversify beyond oil and financial considerations will not be the only factor in its decision, with Saudi authorities also taking the interests of shareholders and the company into account, the sources added.

The advisers' views on the relative merits of London and New York for the listing are being considered by Aramco and a final proposal could be presented to the government in the fourth quarter, the sources said.

London's chances of winning the multi-billion deal were improved by a Financial Conduct Authority plan to create a new listing category for companies controlled by sovereign states.

This was a clear sign that London is ready to welcome Aramco and needs its IPO to attract more sovereign-held entities and prove that London remains a good place to do business after the country leaves the European Union, one of the sources said.

Changes proposed by the regulator, which declined to comment, are seen as making London more attractive to state-controlled firms such as Aramco as well as other Gulf countries, including Oman and Abu Dhabi, considering listing oil assets.

The FCA proposal will be reviewed until Oct. 13 and the regulator will publish new rules towards the end of the year.

Aramco is less enthusiastic about listing on a third exchange, possibly one in Asia, and may prefer to stick to a dual listing process that involves Riyadh's Tadawul and London Stock Exchange (LSE.L), one of the sources said.

Aramco, London Stock Exchange and New York Stock Exchange all declined to comment, while there was no immediate comment from Saudi officials contacted by Reuters.

Bankers expect to get more clarity on Aramco's listing plans at a conference organized by Saudi Arabia's Public Investment Fund (PIF) on Oct. 24 to 26 in Riyadh, one source said.

Senior Saudi Aramco executives, including its chief executive, are scheduled to meet on Aug. 3 in London for a regular review of ongoing business activities, others said.