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THE HEADLINES
DON’T CALL IT A COMEBACK
Saudi Arabia’s state-owned oil company, Saudi Aramco is resuscitating plans to IPO next year. But the closely-held Saudi company has stuck to the G-code thus far, keeping any valuation figures close to the chest. That said, it’s probably safe to assume that the listing will be the largest IPO of all time.
The royal family plans to raise funds to finance social and military projects as well as build a futuristic city called Neom … which apparently isn’t a new James Cameron movie.
This sounds familiar
That’s because it is. Crown Prince Mohamed bin Salman’s master plan was to list 5% of Aramco at a $2T valuation in 2018. At that valuation, even the 5% listing would have been the largest IPO ever at $100B (Alibaba, the current largest is $25B).
But it turns out that the Prince’s word wasn’t enough to inspire investors to throw money at the oil company. It appears that other valuations didn’t quite measure up to the Saudi’s number. On top of that, Saudi officials wanted to purchase Sabic, a petrochemical company that would help diversify Aramco. A $69B deal was announced in March but has yet to be finalized.
And it probably didn’t help that Crown Prince MbS has been accused of offing journalist Jamal Khashoggi …
Liquid gold
Back in April Saudi Aramco issued a round of bonds. The outcome? *Borat voice* very nice. Investors flocked to the bonds faster than high school kids to a windowless van with “Free JUUL pods” written on the side. In total, Saudi Arabia issued a total of $12B worth of bonds, but there was an appetite for much, much more.
Open book
Based on the bonds issued in April the Kingdom is confident that it’s got the goods for an IPO. So much so that the company is doing something its never done before … holding an earnings call to showcase its results for the first half of the year.
NO LAWS WHEN YOU’RE DRINKING …
… Natural Light Seltzer.
“That’s exciting. White Claw is so expensive.” – Paxson Sutton, 21-year-old frat star from UNC-Chapel Hill who is sick and tired of having to pay for overpriced seltzers with his dad’s credit card.
No, seriously, the WSJ went there …
Naturdays are for the boys
Anheuser-Busch InBev, the maker of Natural Light, the preferred cold one of dudes named Chad is launching cleverly named hard seltzers (think: “Catalima Wine Mixer”) as it looks to unseat White Claw and Truly as college staples.
Unsurprisingly, Natty is doing things its own way. The “skinny” cans White Claw and Truly have made synonymous with the alcoholic La Croix’s is going the way of Schlitz. Natural Light Seltzer will be available in 12-ounce cans (think: normal beer cans) and 25-ounce tallboys. No word on the company’s plan for forties.
AB is also waging a price war. The Natty seltzers will cost 20% less (or roughly $1 less per 12-pack) than other popular glorified Zimas. Oh, and did we mention that the “Natural” branded crispy boys will have 6% alcohol by volume?
D*ck measuring contest
Currently, AB InBev owns just 7.4% of the $515M US seltzer market with its Bon & Viv brand. White Claw, made by the Mike’s Hard Lemonade Co. and Truly, a Boston Beer Co. product own 54% and 29% of the market respectively.
WE LIKE SPORTZ …
BlackRock had itself a Sunday Funday, announcing yesterday morning that the investment firm would become the majority shareholder in Authentic Brands Group.
Whomst?
Authentic Brands Group is the brand development, marketing, and entertainment company that owns Sports Illustrated, Nine West, and Juicy Couture, and several other household names.
The $875M investment will earn Blackrock’s private equity fund, Long Term Private Capital, a 30% stake, pushing Authentic Brand’s valuation to roughly $4B *whispers* including debt. Long Term will replace Leonard Green & Partners as the majority shareholder, with private equity firms General Atlantic and Lion Capital selling off some, but not all, of their stakes.
This investment fits well with Blackrock’s diversification strategy to move away from index funds and invest into business lines that allow the funds to be locked up for longer periods of time and collect higher fees.
Long Term was created to mimic sovereign-wealth funds, allowing investors to hold their bets as long as they desire, instead of typical private-equity funds that are forced to return capital to investors within a period of time.
IN OTHER NEWS
iStockphoto
- Sex offender Jeffrey Epstein “allegedly” committed suicide over the weekend. Epstein, who was 66, found time to dabble in finance in between his day job of being a f*cking creep. In case you’ve been living under a rock, there are a slew of conspiracy theories bubbling regarding his ‘suicide.’ #staywoke
- Malaysia has filed criminal charges against 17 current and former C-suite members of Goldman Sachs, as part of the 1MDB witch hunt. The C-suite 17, as they should be addressed going forward, were directors of the three GS units that ‘allegedly’ mislead investors when arranging the $6.5B bond sale deal in 2012 and 2013 which netted the bank some $600M.
- Huawei unveiled its new operating system to replace Google’s Android on its devices. HarmonyOS was developed to run on all Huawei devices, as the Chinese tech company can no longer use Android following the US’ blacklisting. This comes at a time when the company is struggling to replace its reliance on US suppliers after Washington added Huawei to its ‘entity list’ in May.
- “Newman!” Looks like the USPS isn’t impervious to the Amazon effect either. The Postal Service delivered fewer packages during the quarter for the first time in 9 years. Parcel delivery fell by 3.2%. It isn’t just Amazon that is delivering more and more packages directly to homes on its own. Fun fact: FedEx and UPS rely on the USPS for “last mile delivery” (aka delivering directly to your door). But increasingly those couriers are going all “I can do it myself, asshole.”
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