London Is Creating A New Listing Category For Companies That Begin With 'S' And End With 'Audi Aramco' - Dealbreaker

London Is Creating A New Listing Category For Companies That Begin With 'S' And End With 'Audi Aramco'

Which of course has nothing to do with attracting the biggest IPO in history.
King Salman (Getty Images)

(Getty Images)

Over the past year, stock exchanges, investment bankers and government officials from both London and New York have taken turns supplicating at the feet of the Saudi royal family in a quest to win the Saudi Aramco's gargantuan, record-breaking partial IPO. The listing, estimated to be valued somewhere between $400 billion and $2 trillion, would obviously be a cash bonanza for everyone involved, the likes of which public markets have never seen.

In completely unrelated news, the U.K. has a neat idea:

The Financial Conduct Authority said on Thursday it was planning to create a new listing category for sovereign-controlled companies that are looking to privatise. The move is part of broader plans by the FCA to reform equity and debt markets in an attempt to keep the UK open for business after Brexit.

See, the U.K. was stung in recent years after giant listings by shady foreign oligarchs ended up imploding in clouds of corruption and deceit, and lately beefed up protections to keep that sort of unpleasantness from happening again. But hey:

“Sovereign owners are different from private sector individuals or companies — both in their motivations and in their nature,” said Andrew Bailey, the FCA’s chief executive. “Investors have long recognised this and capital markets are well adapted to assess the treatment of other investors by sovereign countries.”

Because there's no way a sovereign entity could end up collapsing into a morass of theft and fraud, right? Anyway, before you try to connect this little dot to the unprecedentedly large dot hovering inches away from it, keep this in mind:

Mr Bailey denied that the plans were formulated with Saudi Aramco in mind, or that the FCA had succumbed to political or industry pressure. The FCA first published its initial thoughts on a new listing category in February. “We are not under pressure at all,” he told the Financial Times. “I’m never going to say ‘I have never talked to other parties’ as that is not true. But [ . . .] I would define ‘pressure’ if this were a regime that were critically compromised. I certainly don’t regard it as that.”

It's always helpful when one's denial of “x” includes the caveat “if by x you mean not-x.”

Your move, America.

London reforms set to open door for Saudi Aramco listing [FT]