Saudi Arabia’s Roots Said to Hire GIB to Manage IPO

Saudi Arabia’s Roots Group Arabia hired Gulf International Bank as financial adviser on its initial public offering, three people with knowledge of the matter said.

The company, whose shareholders include the Saudi Binladin Group, plans to raise more than 1 billion riyals ($270 million) through the sale of a 30 percent stake on the Saudi Stock Exchange (SASEIDX), one of the people said, asking not to be identified as the information is private. Roots Group had appointed JPMorgan Chase & Co. as adviser before deciding to replace the U.S. bank late last year, three people said in November.

Roots, which provides material to the building industry and had $930 million of sales in 2013, joins several Saudi Arabian companies planning to sell shares as the stock market prepares to open to foreign investors in the first half of the year. HSBC Holdings Plc said in November that the market opening could attract $23 billion of new money into the exchange.

Saudi Arabia’s Fawaz Alhokair Group plans to raise $2 billion from the IPO of its Arabian Centres malls unit in 2016, a company executive said in a Nov. 16 interview. Energy producer Acwa Power is also planning to sell shares this year.

Proceeds from the Roots sale will be used to fund expansion in the Middle East and Africa, one of the people said.

Roots Group and GIB declined to comment.