By Maha El Dahan and Hadeel Al Sayegh

DUBAI, June 7 (Reuters) - Saudi Arabia is poised to

raise more than $11.2 billion from its secondary offering of oil

giant Aramco's shares, after pricing them towards the lower end

of a price range at 27.25 riyals ($7.27), people familiar with

the matter told Reuters on Friday.

Aramco's book was covered four to five times near

the bottom of the price range of 26.7 to 29 riyals, one of the

people said.

The pricing is a nearly 4% discount to where Aramco's shares

closed on Thursday and gives Aramco a valuation of about $1.76

trillion. Its market capitalisation, according to its Thursday

share price, was about $1.83 trillion.

The Saudi government is selling a roughly 0.64% stake in

Aramco in a landmark deal that could help fund Crown Prince

Mohammed bin Salman's plan to diversify the economy.

The offering could then be boosted to 0.7% of the oil giant

in a so-called greenshoe option, which allows bankers to use

shares to stabilise the price of the offering.

If that option is exercised, Aramco would raise roughly

$12.36 billion. The world's top oil exporter exercised a

greenshoe option after its 2019 initial public offering (IPO) to

raise $29.4 billion, which remains the world's largest IPO.

The banks on the deal took orders through Thursday and

shares are set to start trading next Sunday on Riyadh's Saudi

Exchange.

The offering is codenamed Project Bond and has been in the

works for months as a key step in drawing a broader range of

investors after Aramco's record-breaking IPO, sources have said.

The deal will be a test of interest in Saudi markets after

lukewarm demand from international investors for that IPO amid

concerns about a high valuation, Saudi government control and

the energy transition away from hydrocarbons.

($1 = 3.7504 riyals)