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JPMorgan close to winning lead advisory role for Saudi Aramco IPO: Reports

Reuters and CNBC both say investment bank has inside track, citing people familiar
As lead adviser, JPMorgan would be in line for highest fees on Aramco stock sale (AFP/File photo)

JPMorgan Chase is close to winning the lead advisory role for Saudi Aramco's initial public offering, a source familiar with the situation told Reuters on Sunday.

CNBC also reported on Sunday that JPMorgan has the inside track on the role for Aramco’s IPO, citing “people with knowledge of the situation”.

Aramco and JPMorgan declined to comment, Reuters said.

Reuters reported last month that Aramco formally asked major banks to submit proposals for potential roles in its planned IPO.

A final decision is likely to come later this week, the source told Reuters, asking not to be identified.

Saudi officials want to push ahead with a listing as early as November, the source said, adding that the tentative plan is to first list on the domestic exchange and then to sell stock in an international listing in 2020.

Reuters also reported on Sunday that Aramco is likely to give IPO roles to Citigroup, Goldman Sachs Group, HSBC Holdings and Samba Financial Bank, with the oil giant expected to appoint the advisers on its share sale in the coming days.

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Morgan Stanley, which had been jockeying with JPMorgan for top billing on the deal, was hurt by its work leading the Uber IPO in May, CNBC said, citing the people familiar.

Saudi officials, who are large owners of Uber through the kingdom’s sovereign wealth fund, were displeased with Morgan Stanley after its bankers misjudged demand for the ride-sharing company and its shares fell 18 percent in the first two days of trading, according to CNBC.

As lead adviser, JPMorgan would be in line for the highest fees, be privy to important discussions regarding the IPO and coordinate with other investment banks on the deal as they distribute shares to their respective institutional clients.

Still, the share sale was delayed last year, so the IPO process is not a sure thing.

At that time, Saudi officials said they wanted to raise $100bn in what would have been the world’s biggest stock sale by offering a 5 percent stake in Aramco, valuing the company at $2 trillion.

That would have far outstripped the $25bn raised in the 2014 IPO of Chinese e-commerce company Alibaba.