Aramco May Shun Direct IPO Marketing to U.S. Funds on Legal Risk - Bloomberg

Aramco May Shun Direct IPO Marketing to U.S. Funds on Legal Risk - Bloomberg:

Saudi Aramco is considering a structure for its initial public offering that would prevent it from marketing the deal directly to fund managers in the U.S., people with knowledge of the matter said.

The state-owned oil giant wants to avoid litigation risks that could result from selling the deal to U.S.-based institutions, according to the people, who asked not to be identified because the information is private. Aramco is consulting with its bankers on the pros and cons of different deal structures, and it hasn’t made any final decision, the people said. 

Many foreign IPOs rely on the “Rule 144A” structure, which allows overseas companies to market offerings to institutional investors in the U.S. The method being considered by Aramco is a so-called “Regulation S only” transaction, which would limit it to selling stock to foreign buyers and overseas units of U.S. fund houses, the people said.