Bankers set Saudi Aramco share price in secondary offering

While Saudi Arabia’s impending sale of a second chunk of shares in Aramco looks like it will be among the world’s biggest stock offerings in years, the deal is falling slightly shy of expectations.

After almost a week of marketing the sale in London, New York and other financial capitals, the kingdom’s bankers told investors they plan to price shares of the world’s biggest oil company at 27.25 Saudi riyals ($7.27) each, the Wall Street Journal reports.

That compares to the target range of 26.70 to 29 riyals and means the offering should yield $11.2 billion rather than the $12 billion previously mooted.

The reduced bounty could mean more budget tightening for some of the country’s mega-projects, such as Neom, that the offering is meant to finance, especially as oil prices slide below $80 a barrel.

Sustaining the ambitious pace of construction envisioned by Saudi Crown Prince Mohammed bin Salman would require crude oil prices closer to $100 a barrel, according to calculations by the International Monetary Fund cited by Bloomberg.

Among the stock offering’s attractions for investors are the steady and increasing dividend payouts Aramco offers relative to its global oil competitors.

The company carries a dividend yield of close to 7%, higher than the 3.4% at Exxon and 4.2% at Chevron, the Journal notes.

Intel preparing to sell off $1.5 billion stake in Israel’s Mobileye

Since Mobileye Global, the Israeli developer of self-driving car technology, sold shares last year in an IPO, its stock price has doubled. Now Intel Corp. is planning a secondary offering to carve some profit from the pioneering automotive startup it bought six years ago for more than $15 billion.

Intel, one of the largest computer chipmakers, will sell 35 million shares in its Jerusalem-based subsidiary, a stake worth about $1.5 billion, with an option to sell another 5.25 million shares, Mobileye said in a June 5 filing with the U.S. Security and Exchange Commission. Goldman Sachs and Morgan Stanley are managing the sale, which will leave Intel solidly in control with more than 88% of the shares.

Mobileye is a world leader in creating software, semiconductor chips, cameras and sensory arrays to enable the development of self-driving vehicles. BMW, Volkswagen and Nissan are among its clients. Senior auto executives regularly make the pilgrimage to Jerusalem to meet with Mobileye CEO Amnon Shashua.

The company raised some $860 million in its IPO at the end of October, giving it a market value of about $21 billion after the first day of trading. That was well short of the $50 billion Intel had earlier expected as it was making preparations for the initial offering. Since then the stock price has nearly doubled from $21 a share to $41.77 at the end of last week as its market cap surged to $34 billion. The sale will give Intel cash at a time that it has announced plans to invest in artificial intelligence, vying with upstart competitors such as Nvidia.

Mobileye shares are likely to reach $50 a share over the 12 months, according to Canaccord Genuity, a Toronto-based investment bank, which initiated coverage of the company last week with a “buy” rating. In an analyst note, Canaccord described autonomous driving as  “one of the highest value-creating technologies to be deployed. Ever.”

Noting Mobileye’s “impressive growth indicators and long-term potential within its category,” the investment bank said the company has a “dominant” 70% share in the advanced driver assistance systems (ADAS) market, adding that “its advantageous position in the emerging full self-driving market further strengthens its prospects.”