MBC IPO: Regional broadcaster looks to raise $222m from Tadawul listing

The media and entertainment company has set the price range of the offering between 23 and 25 Saudi riyals a share

Growth in Mena IPO deals this year is driven by Saudi Arabia and the UAE. Reuters

Shareholders in MBC Group are looking to raise as much as 831 million Saudi riyals ($222 million) through the listing of the media and entertainment company on Saudi Arabia’s Tadawul stock exchange.

The regional broadcaster is selling 33.25 million new ordinary shares, equivalent to 10 per cent of its total issued share capital, in an initial public offering, it said in a statement on Thursday.

The price range for the public offering has been set between and 23 and 25 riyals a share. The company expects to announce the final offer price on December 6 when the book building process is scheduled to conclude.

The indicative price band values the company between 7.65 billion riyals and 8.13 billion riyals at the time of listing on the Arab world’s biggest bourse.

The subscription period for the IPO begins on Thursday. Retail investors will be allocated 10 per cent of the total share capital on offer, while the remaining is reserved for institutional investors, the company said.

“Financial advisors may, in co-ordination with the company, reduce the number of shares allocated to participating parties [institutional investors] … to accommodate for individual subscriber demand,” MBC Group said.

The company's shares will start trading on the Saudi Exchange’s main market following the “completion of the IPO and listing formalities” with the Capital Markets Authority, it said without giving a date.

Al Istedamah Holding currently owns 60 per cent of MBC Group, while the remaining stake in the company is held by businessman Waleed Al Ibrahim, who is also group chairman of the company. Post IPO, the shareholders will collectively own 90 per cent of the company.

MBC group on November 21 received the market regulator’s approval to list its shares on the Tadawul exchange. The broadcaster is the latest among Middle East and North African companies seeking to raise capital from equities market amid the listing boom.

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 September report.

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.

Sam Barnett, chief executive of MBC Group and Stu Levy, head of Tokyopop in March signed a deal to launch more anime content through MBC Anime.

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

The company plans to use the proceeds of the public float 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”, it said this month.

The deal will help the broadcaster expand its market position, audience reach and enter new entertainment segments, Mr Al Ibrahim said at the time.

“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,” he had said.

MBC, founded more than 30 years ago, reported a revenue of 3.49 billion riyals last year. It registered a 23 per cent compound annual growth rate between 2020 and 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 this year.

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 Mena region last year.