Alibaba is set to raise up to $12.9bn (£10bn) from its record-breaking second listing in Hong Kong, pricing its shares at a 2.8 per cent discount to their New York close.
The Chinese e-commerce giant is set to officially announce the terms of the deal later on Wednesday, but investors have been told 176 Hong Kong dollars (£17.43) is likely to be the final numbers, Reuters reported.
The deal – set to be the largest share sale in Hong Kong for nine years and a world record cross-border secondary share sale – represents a much-needed boost for the city’s bourse, which has been hit by months of anti-government protests.
At the reported pricing, Alibaba’s secondary listing would raise at least 88 billion Hong Kong dollars – a symbolic total as the number eight is associated with prosperity and good fortune in Chinese culture.
The deal could eventually raise up to $12.9bn if a “green shoe” option is exercised, allowing underwriters to buy up to an additional 15 per cent of shares at the offering price.
An Alibaba spokesperson declined to comment on the pricing to Reuters.
Alibaba shares closed in New York on Tuesday at $185.25, up 0.35%. One of Alibaba’s New York-listed shares will be worth eight of its Hong Kong shares.
The Chinese company’s decision to float in Hong Kong despite months of often-violent anti-government protests is seen as a vote of confidence from Beijing in the city’s status as a Asian financial hub.
It is also regarded as significant to Hong Kong, which lost out on Alibaba’s initial public offering to New York in 2013 as the territory would not then accept the company’s unusual governance structure.
Small investors in Hong Kong have welcomed the deal, subscribing for so many shares they will be allotted the maximum 10 per cent of the total they can get, Reuters reported.
Hong Kong’s exchange operates a system where heavy oversubscription from small investors can result in them getting a greater share of the total offering.
Alibaba’s listing ceremony is due to be held at the Hong Kong Stock Exchange next Tuesday.
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