Middle East broadcaster MBC receives approval for Saudi IPO

The company will be permitted to sell 10 per cent of its share capital in the planned listing on the Tadawul

Saudi Arabia’s Tadawul has recorded a flurry of listings in recent years. Reuters
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Regional broadcaster MBC Group has received approval from Saudi Arabia’s market regulator for an initial public offering amid the listing boom in the Gulf.

The Capital Market Authority has granted approval for MBC to sell 33.25 million shares in the float, amounting to 10 per cent of the company's share capital, it said in a filing to the Tadawul on Tuesday.

“The CMA’s approval on the application shall be valid for six months from the CMA Board resolution date,” it said.

The approval shall be “deemed cancelled” if the offering and listing of the company's shares are not completed within this period.

The offer price will be determined at the end of the book-building period, MBC said in a statement.

The proceeds will be used to repay outstanding debts, enhance liquidity headroom to finance the working capital requirements of the business, content expenditure on the Shahid video streaming platform and investment in new initiatives, the statement said.

The IPO will also support MBC's plans to expand its market position, audience reach and enter new entertainment verticals, Waleed Al Ibrahim, MBC Group’s chairman, said.

“Through this offering, we are inviting investors to be part of a robust enterprise, well-reputed brand, underpinned by strong macro fundamentals and dynamic growth prospects.”

The offer shares will be listed and traded on the Saudi Exchange’s main market. Following the completion of the offering, the current shareholders will collectively own 90 per cent of the company’s share capital, MBC's statement said.

Currently Al Istedamah Holding has a shareholding of 60 per cent, and businessman Mr Al Ibrahim has a shareholding of 40 per cent.

MBC, founded more than 30 years ago, reported a revenue of 3.49 billion Saudi riyals ($930 million) last year. It registered a 23 per cent compound annual growth rate for the period between 2020-2022.

The company’s main business segments include TV broadcasting; the Shahid video streaming platform; MBC Studios (which includes drama series and movie production) and various media related ventures.

It offers 13 free-to-air TV channels and was the number one broadcaster in Saudi Arabia and Egypt during Ramadan period of 2023.

The company said it has maintained a 40 per cent audience share in Saudi Arabia for the past 10 years.

Shahid, which has nearly 3.8 million paying subscribers, had 23 per cent share of total subscribers in the Middle East and North Africa region last year.

The company is expecting expansion through “content diversification, new subscription models, targeted advertising and expanded geographic presence”, chief executive Sam Barnett said.

“Captivating content, cutting-edge technologies and robust data are core to our business and combine to ensure a fantastic service for our viewership of 150 million viewers per week,” Mr Barnett said.

Saudi Arabia dominates the Mena media industry, with a nearly 30 per cent market share, according to a recent report by Meltwater.

The restructuring of the media industry is a key component of Saudi Arabia's strategic ambitions, known as Saudi Vision 2030.

The primary goal is to transform the media business and help the kingdom become a regional content hub.

Regionally, there is increasing activity in the media landscape.

On Tuesday, Dubai-based entertainment streaming service OSN+ and Nasdaq-listed Anghami announced a merger to create one of the Middle East’s largest streaming platforms, to better compete with international rivals such as Spotify and Netflix.

MBC's IPO also comes as Saudi Arabia and the wider GCC region have registered a flurry of listings amid strong investor demand.

The volume of IPOs on bourses in the Mena region climbed by 44 per cent annually in the second quarter of this year amid robust economic growth, according to global consultancy EY.

Growth in Mena IPO deals was driven by Saudi Arabia and the UAE, the top regional economies, EY said in a report in September.

The number of listings rose to 13 during the three-month period to the end of June, bucking the global slowdown in equity capital markets activity, it said.

MBC has appointed HSBC Saudi Arabia, JP Morgan Saudi Arabia and SNB Capital as joint financial advisers, joint bookrunners and underwriters for the IPO.

Updated: November 21, 2023, 5:16 PM