Date
15 December 2019
Eight Hong Kong shares will be equal to one of Alibaba’s New York-listed American depositary shares. Photo: AFP
Eight Hong Kong shares will be equal to one of Alibaba’s New York-listed American depositary shares. Photo: AFP

Alibaba will raise up to US$12.9 billion in HK listing: report

Chinese e-commerce giant Alibaba will raise up to US$12.9 billion in its Hong Kong secondary listing, pricing its shares at a 2.8 percent discount to their last closing price in New York, Reuters reports, citing two sources with direct knowledge of the matter.

The company has given guidance to prospective institutional investors that its shares will price at HK$176 each, the sources told Reuters.

The deal will raise HK$88 billion (US$11.3 billion) before a so-called “greenshoe” over-allotment option is exercised, which could take the total to US$12.9 billion, according to the sources, who asked not to be named because the information has yet to be made public.

Alibaba had previously indicated it could raise up to US$13.4 billion if the greenshoe option is exercised.

In Hong Kong dollar terms, the pricing is symbolic because 8 implies prosperity in Chinese culture.

Alibaba did not immediately respond to a Reuters request for comment.

The price for the retail component of the deal will be finalized in Hong Kong on Wednesday and sources said institutional investors were due to be told at the same time how much stock they will be allocated.

Alibaba shares closed in New York on Tuesday at US$185.25, which was 0.35 percent higher for the session.

In the secondary listing, eight Hong Kong shares will be equal to one of Alibaba’s New York-listed American depositary shares (ADS), according to documents lodged with US regulators.

China International Capital Corporation (CICC) and Credit Suisse were the sponsors for the Hong Kong deal, which is the world’s biggest cross-border secondary listing to date, according to Dealogic.

The shares will be fully interchangeable between the New York and the Hong Kong stock exchanges.

– Contact us at [email protected]

CG