| NEW YORK/LONDON/DUBAI
NEW YORK/LONDON/DUBAI Boutique investment bank Moelis & Co (MC.N) has been chosen as an adviser by Saudi Aramco [IPO-ARMO.SE] 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 (1910.HK) on its $1.3 billion IPO in 2011 and last year's flotation of Extraction Oil & Gas Inc (XOG.O), which valued the company at $3.23 billion..
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 (MS.N), HSBC Holdings Plc (HSBA.L) and Citigroup Inc (C.N) 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 (JPM.N) 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 business.
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 exchange.
(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)