* Moelis wins mandate to help prepare world's biggest IPO
* Moelis shares rise as much as 7 pct
* New York bank worked for years to win a Saudi Aramco role
(Adds share reaction, details on Moelis' role)
By Lauren Hirsch, Clara Denina and Hadeel Al Sayegh
NEW YORK/LONDON/DUBAI, Feb 8 Boutique investment
bank Moelis & Co has been chosen as an adviser by Saudi
Aramco on what is expected to be the world's
biggest initial public share offering, sources familiar with the
matter told Reuters.
The IPO, which Saudi officials expect to value the oil
producer at a minimum of $2 trillion, is the centrepiece of a
Saudi Arabian government plan to transform the economy by
attracting foreign investment and diversifying away from oil.
Moelis will be the internal independent adviser, a key
position in which it will provide counsel on selection of
underwriters, how much to pay them and where the shares should
be listed, said the sources, who spoke on Tuesday and Wednesday.
The persons spoke only on condition of anonymity because the
process is confidential.
Moelis' appointment is a big win for the New York bank,
dwarfing previous IPO advisory mandates that include luggage
maker Samsonite International SA on its $1.3 billion
IPO in 2011 and last year's flotation of Extraction Oil & Gas
Inc, which valued the company at $3.23
Moelis, founded by veteran U.S. dealmaker Ken Moelis in
2007, itself went public less than three years ago.
Moelis shares rose as much as 7 percent on Wednesday and
were still up 2.6 percent at $35.90 in late morning.
The major selling point of boutique banks is that their lack
of sales and trading divisions allows them to offer unconflicted
advice to corporate clients.
Moelis' win comes after the bank bulked up its energy
business and presence in the Middle East. It opened offices both
in Houston and the United Arab Emirates in 2011. The Houston
unit, which hired three people last year, now has six managing
directors and one senior adviser.
In the UAE, advisory positions include Dubai ports operator
DP World Ltd on its $3.5 billion acquisition of Economic Zones
World FZE and the Government of Dubai on the $24.9 billion
restructuring of state-owned conglomerate Dubai World.
Senior dealmakers at the bank, which has offices around the
world, have worked for years to win a role with Saudi Aramco,
one of the sources said.
Saudi Aramco is expected to decide by early next week on the
appointment of international and local banks for preparatory
work, the people said.
Representatives of Moelis and Saudi Aramco declined to
comment on Wednesday.
Local and major international banks including Morgan Stanley
, HSBC Holdings Plc and Citigroup Inc were
among those asked to pitch for an advisory position with Aramco
three weeks ago, Saudi-based industry sources said last month.
Wall Street bank JPMorgan and independent boutique
bank Michael Klein had already been picked to advise the country
ahead of any listing.
Generally, government work is poorly paid all over the
world, but banks often vie for the contracts simply to build a
relationship with the state in the hope of winning future
The listing of Aramco is slated for 2018, so the appointment
of banks to run the share sale as lead managers and book runners
is still some way off, the sources said.
Saudi Energy Minister Khalid al-Falih said last week the
company was evaluating concurrent listings on more than one
(Additional reporting by Ron Bousso and Pamela Barbaglia in
London, Bhanu Pratap in Bengaluru and Reem Shamseddine in
Riyadh; Writing by Dasha Afanasieva; Editing by Jane Merriman
and Matthew Lewis)