JPMorgan Said to Be Dropped by Saudi Arabian Roots on IPO

Saudi Arabia’s Roots Group Arabia is replacing JPMorgan Chase & Co. (JPM) as financial adviser on its planned initial public offering, according to three people with knowledge of the matter.

The company, which had $930 million of sales in 2013, expects to list shares on the Saudi Stock Exchange, the people said, asking not to be identified as the information is private. Bahrain’s Gulf International Bank may replace the New York-based bank, one of the people said. The IPO is expected to raise about 1 billion riyals ($267 million), one of the people said.

Roots Group, which provides materials to the construction industry, is joining companies across the Middle East that are planning share sales amid surging stock markets.

The Saudi Stock Exchange has risen 9.8 percent this year and will open to direct foreign investment for the first time by mid-2015.

HSBC Holdings Plc said earlier this month 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 an Nov. 16 interview.

A spokeswoman for JPMorgan declined to comment as did Roots Group. Gulf International didn’t immediately return calls and emailed requests for comment.