Prince seeks king's ransom

Saudi Prince Alwaleed bin Talal, who amassed the world's fifth-biggest fortune with timely investments in companies including Citigroup, now plans what may be this year's biggest initial stock sale.

Alwaleed wants to raise about US$6 billion ($9 billion) by selling a stake in his Kingdom Holding, a source said yesterday.

In an interview on Thursday, the prince said he would offer at least 30 per cent of the Riyadh-based firm, Saudi Arabia's biggest company by revenue.

Through Kingdom Holding, Alwaleed holds a 4.3 per cent stake in Citigroup, the world's most profitable bank, as well as shares in more than a dozen businesses including Time Warner and News Corp.

The prince's record as an investor and a Saudi market whose benchmark index surged 134 per cent in the past year may stoke demand for the IPO.

"The appetite to be partners with Alwaleed is there," said Alfredo Rotemberg, who helps manage US$200 million in international investments at OppenheimerFunds in Beechwood, Ohio.

"He's been a good buyer of companies."

A US$6 billion IPO would be equivalent to all the public offerings in Arab countries last year, according to ABQ Zawya, a business-information service in Dubai, United Arab Emirates. It would dwarf MasterCard's planned US$2.45 billion sale, currently the biggest IPO set for this year. The Saudi Arabian stock market, the largest emerging equity market, has jumped as record oil revenue fuelled investment.

"This is an ideal time to float shares and take advantage of stratospheric valuations in Saudi Arabia," said Joe Kawkabani, a money manager at Dubai-based Shuaa Capital.

At least 100 companies throughout the Middle East plan to go public this year, more than double last year's number, says ABQ Zawya. Alwaleed's IPO would still fall short of the US$9.2 billion that China Construction Bank raised last year and a US$7.4 billion IPO by Electricite de France, each of which ranked among the 10 biggest initial stock sales ever.

Alwaleed, a nephew of Saudi King Abdullah, made billions of dollars by buying shares in underperforming, brand-name companies. In 1991, he invested US$590 million in Citigroup predecessor Citicorp, which needed cash as it struggled with Latin American loan losses and a collapse in US real estate prices.

Alwaleed, who at the time already owned US$207 million of the stock, now holds about US$10 billion of Citigroup shares.

The offering "will be very big" and take place "early" this year, Alwaleed said in the interview, declining to be more specific. A publicly traded company had "better access to the debt and equity markets". he said.

Forbes magazine on February 20 reported Alwaleed's IPO plan.

Kingdom Holding generated sales in 2004 of US$18.8 billion, according to Arab News, which compiles an annual list of Saudi Arabia's biggest 100 companies.

Forbes magazine last March valued Alwaleed's assets at US$23.7 billion.

- BLOOMBERG