State-owned Postal Savings Bank of China (PSBC, 01658.HK) priced its Hong Kong initial public offering near the bottom of expectations, valuing the deal at US$7.4 billion, IFR reported on Wednesday.
The bank, seeking to bolster its balance sheet and fund future lending growth, had originally sought to raise up to US$8.1 billion, counting on its network of more than 40,000 branches and low level of non-performing loans to attract investors, Reuters said.
But it had to pare back the size of the offering as some investors balked at paying valuations higher than domestic rivals.
Even so, it is the world’s biggest IPO since e-commerce company Alibaba Group Holding Ltd. went public in 2014 in a record US$25 billion deal.
PSBC priced the 12.1 billion new shares at HK$4.76 each, after marketing the IPO in an indicative range of HK$4.68 to HK$5.18 per share, Thomson Reuters publication IFR said, citing people close to the deal.
PSBC declined to comment on the IPO pricing.
Bank of America Merrill Lynch, China International Capital Corp., Goldman Sachs, JPMorgan and Morgan Stanley were hired as sponsors of the IPO and will earn US$100,000 each in sponsor fees, according to PSBC’s IPO prospectus.
Five other banks including Citigroup, HSBC Holdings (00005.HK) and UBS were also hired as joint global coordinators, with another 16 banks also acting joint bookrunners.
In all, the 26 banks stand to jointly earn up to US$118.4 million in fees from the deal, equivalent to a 1.1 percent underwriting commission and a 0.5 percent incentive fee, according to the prospectus.
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