The Alibaba Group Holdings Ltd. headquarters stand illuminated at night ahead of the annual November 11 Singles’ Day online shopping event in Hangzhou, China, on Sunday, Nov. 10, 2019.
Qilai Shen | Bloomberg | Getty Images
Alibabaannounced pricing of shares for its upcoming secondary listing inHong Kongin which it could raise up to $ 13 8 billion.
The Chinese e-commerce giant will issue 500 million new ordinary shares plus 75 million “greenshoe” options. These give the underwriting banks the ability to sell more shares than the original amount set.
Of those 500 million shares, 12 .5 million will be reserved for retail investors. Alibaba has the option to increase the portion available for retail investors to 50 million shares or 10% of the total offering.
The company said those retail shares will be priced at no more than 188 Hong Kong dollars (about $ 24. ).
However, the remaining shares for institution investors, could be priced higher than that.
At 188 Hong Kong dollars a share, the total amount raised will be around $ 13 .8 billion if the greenshoe option is exercised.
Alibaba will set the final offer price by Nov. 20 Hong Kong time “by taking into consideration, among other factors , the closing price of the ADSs on the NYSE on or before the last trading date and investor demand during the marketing process. “
ADS refers to the company’s US listed *** American Depositary Shares.
Alibaba’s Hong Kong shares are expected to begin trading on Nov. 26.
Alibaba “plans to use the proceeds from the offering for the implementation of its strategies of driving user growth and engagement, empowering businesses to facilitate digital transformation, and continuing to innovate and invest for the long term. “
The company has continued to invest in areas from food delivery to its fast-growing cloud computing business, which isseen as a crucial part of its future.
When the Hangzhou, China-based firm went public in 2014, it chose New York over Hong Kong because the latter would not allow dual class stock. These are shares which give different voting rights. But since then, the Hong Kong stock exchange has reformed its rules to allow dual class share structures.
“When Alibaba Group went public in 2014, we missed out on Hong Kong with regret. Hong Kong is one of the world’s most important financial centers, “Daniel Zhang, CEO andchairman of Alibaba said in a letter to investors.
“Over the last few years, there have been many encouraging reforms in Hong Kong’s capital market.During this time of ongoing change, we continue to believe that the future of Hong Kong remains bright. We hope we can contribute, in our small way, and participate in the future of Hong Kong. “
Alibaba’s Hong Kong listing would make it the biggest fundraising of the year, ahead of Uber which raised over $ 8 billion in May. It would also be a huge boost for the Hong Kong market which has seen business slow amid the ongoing pro-democracy protests, which have escalated in the past few days.
Alibaba said New York will remain its primary listing venue. It’s U.S. listing is still thebiggest IPO in historyraising $ 25 billion.
CICC and Credit Suisse are the joint sponsors and joint global coordinators for the proposed offering . Citigroup, J.P. Morgan and Morgan Stanley are also acting as joint global coordinators.