Saudi Sovereign-Wealth Fund Acquires Stake in Royal’s Investment Firm

In a significant move, Saudi Arabia’s sovereign-wealth fund has made a strategic acquisition of a stake in a firm owned by the prominent billionaire, Prince al-Waleed bin Talal. This action further cements the government’s ties with a high-profile investor who had previously faced state detainment due to allegations of corruption.

A Transformational Investment

On a recent Sunday, the Public Investment Fund (PIF) of Saudi Arabia reached an agreement to purchase a 16.9% stake in Kingdom Holding Co., owned by Prince al-Waleed. The deal involved a payment of $1.51 billion, a valuation based on the closing price on the last trading day prior to the official announcement. This transaction was disclosed through a filing submitted to the Saudi stock exchange.

Strengthening Royal Connections

Despite this acquisition, Prince al-Waleed will continue to hold a controlling majority stake of 78.13% in Kingdom Holding. Additionally, a portion of the company, accounting for 5%, will be publicly listed on the exchange. A representative from PIF, a key player in the endeavor to diversify the Saudi economy away from oil reliance, will join the board of the investment firm. This demonstrates the collaborative efforts between the public sector and private enterprise. Notably, the value of Kingdom’s shares surged by 10% following the announcement, reflecting market confidence in the strategic move.

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A Profile of Prince al-Waleed

Prince al-Waleed, aged 67, boasts a notable investment portfolio that includes a stake in Twitter Inc. He has recently demonstrated support for Elon Musk’s endeavor to assume control of the social-media giant.

Overcoming Challenges

Prince al-Waleed gained global attention when he was among the high-profile individuals detained during a 2017 crackdown on businessmen and royals at Riyadh’s Ritz Carlton Hotel. During that period, he was required to relinquish $6 billion worth of assets to secure his release, although specifics of the settlement remained undisclosed. It remains uncertain whether the current transaction is linked to that prior episode.

A Business-Oriented Transaction

A spokesperson for Prince al-Waleed clarified that the recent deal is purely a “commercial transaction,” referring to the formal filing submitted to the stock exchange. Conversely, a spokesperson for PIF chose not to provide a comment. Notably, there has been no immediate response from the Saudi government on this matter.

Enhanced Government-Investor Nexus

The acquisition made by PIF, which operates under the guidance of de facto Saudi leader Crown Prince Mohammed bin Salman, serves to deepen the interconnectedness between the Saudi state and Prince al-Waleed. This development comes at a juncture when the billionaire investor has re-entered the public sphere after maintaining a low profile for several years subsequent to his detainment.

From Rejection to Collaboration

In an intriguing turn of events, Prince al-Waleed initially rejected Elon Musk’s proposal to acquire Twitter. This social media platform held stakes owned by the prince and his company over an extended period. However, subsequent to the initial rejection, the Saudi royal, who is a relative of both Saudi King Salman bin Abdulaziz and Prince Mohammed, engaged with Musk. He endorsed Musk as a potential “excellent leader” for Twitter, capable of maximizing its value. In light of this, Prince al-Waleed decided to retain a stake valued at $1.9 billion in Twitter as part of Musk’s pending takeover, which remains on hold.

Saudi Arabia’s Complex Relationship with Twitter

Saudi Arabia’s relationship with Twitter has been fraught with complexity. In 2019, U.S. federal prosecutors accused two former Twitter employees and a Saudi national of espionage, alleging that they spied on Twitter users critical of the Saudi regime and shared this information with Saudi authorities. The kingdom has previously faced accusations of aggressively targeting those who oppose the regime and employing Twitter to disseminate positive messages about the nation.

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Addressing Controversies

A point of contention arose in 2018 when the Central Intelligence Agency concluded that journalist Jamal Khashoggi, known for his criticism of Saudi Arabia, was assassinated under the orders of Prince Mohammed. Saudi Arabia, however, denied these allegations.

Prince al-Waleed’s Financial Impact

Prince al-Waleed’s influence in the financial world traces back to the 1990s when he acquired a stake in a predecessor of Citigroup Inc. This banking institution has since become increasingly active in Saudi Arabia. Assisted by Prince al-Waleed’s backing, Citigroup has emerged as a key financial entity supporting Prince Mohammed’s efforts toward economic transformation.

In conclusion, the recent acquisition by Saudi Sovereign-Wealth Fund of a stake in Kingdom Holding Co., owned by Prince al-Waleed bin Talal, underscores the intricate ties between the government and prominent investors. As this collaboration unfolds, it not only transforms the economic landscape but also underscores the complexities of international business and politics.

Source: https://www.wsj.com/articles/saudi-sovereign-wealth-fund-buys-stake-in-royals-investment-firm-11653220519