Alibaba, the e-commerce giant, is pricing its shares at a 2.8 per cent discount on its last closing price on Wall Street in order to raise up to US $ 12.9 billion in its Hong Kong Secondary Listing.
The company’s shares are likely to be priced at HK $ 176 or US $ 22.48.
The company is looking at issuing 500 million new ordinary shares which are likely to raise HK $ 88 billion (US $ 11.3 billion) before a so-called ‘greenshoe’ over-allotment option that will have 75 million more shares.
This option could take the total to US $12.9 billion, although this information has not been revealed by the company itself. The ‘greenshoe’ option gives the underwriting banks the ability to sell more shares than the original amount set.
The Chinese e-tailer could be raising up to US $ 13.4 billion if this option is exercised.
Of those 500 million shares, 50 million will be reserved for retail investors.
The retail portion of the secondary listing has not been priced yet, but that is expected to be revealed today.
Retail shares are ‘likely to be priced around the same level’ as the institutional portion.
In the secondary listing, 8 Hong Kong shares will be equal to one of Alibaba’s New York-listed American Depositary Shares (ADS), according to documents lodged with the US regulators.
China International Capital Corporation (CICC) and Credit Suisse were the sponsors for the Hong Kong deal, which is world’s biggest cross-border secondary listing to date, according to Dealogic.
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