London remains in pole position to land the $2 trillion float of Saudi Aramco, despite a move to delay it until next year.
The Saudis had been looking to float 5% of the giant oil business this year as part of plans to open up the economy and raise money to diversify it away from oil.
Crown Prince Mohammed bin Salman was in the UK last week and is said, reports the FT today, to have signalled that a delay is likely.
City sources confirmed a “shift in tonality” about when the float might happen, but bankers still think London, rather than New York or Hong Kong, is likely to win the business.
That’s a hugely controversial move among London bankers and regulators, since a float of at least 25% of the shares would normally be required for a “premium” listing.
The Financial Conduct Authority, perhaps under pressure from top politicians, has already indicated it is willing to bend the rules in this case.
The Saudis are said to be concerned that a New York listing would open them up to more legal actions, given the US’s notoriously litigious culture.
Royal London Asset Management is among the voices which have said London should not change its rules to land a prestigious and lucrative float.
The management of Saudi Aramco, including chief executive Amin Nasser, say the float is part of the process by which a closed society and company becomes more open and more modern.
Not all oil experts think Aramco is really worth $2 trillion in the first place. Bankers’ ability to persuade investors of this valuation will be key.