The Alexandria Mineral Oils Company (AMOC): A Strategic Assessment of AMOC’S IPO

Eskandar Tooma (American University in Cairo (AUC), Egypt)
Copyright: © 2011 |Pages: 97
EISBN13: 9781613504093|DOI: 10.4018/978-1-60960-583-4.ch007
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This case deals with a critical question about the underlying motives for Initial Public Offerings (IPOs), using the events surrounding the IPO of the Alexandria Mineral and Oils Company (AMOC) in Egypt. AMOC, a government-owned company that was seeking partial privatization, was offered to the public at LE 45per share, and in no more than one week of trading, the share price skyrocketed to LE 85, almost doubling the company’s price/earnings (P/E) ratio. This was a matter of major concern to the company’s management, since the high P/E ratio detracted from AMOC’s attractiveness to a strategic investor. The case gives an overview of AMOC’s main business activities and of the local and international petroleum industry and highlights the process of an initial public offering as well as the parties involved.
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