SK Hynix's US$28 billion (HK$218.4 billion) U.S. listing has been oversubscribed several times ahead of its pricing on the upcoming Thursday, Bloomberg reported, citing people familiar with the matter.
South Korean memory chip giant’s offering has seen strong subscription demand from global long-only funds and technology-themed investors. Bloomberg reported that approximately 1,000 institutional investors attended the management marketing presentation on Monday.
SK Hynix launched the approximately US$28 billion American Depositary Receipt (ADR) sale plan on Monday, offering a total of 177.9 million ADR units, with the pricing benchmarked against the Friday closing price of its ordinary shares in Seoul. This deal is expected to set a record for the highest fundraising amount by a foreign company listed in the United States.
The ADR conversion ratio is set at 10 ADR units per ordinary share, with a total issuance of approximately 2.5 percent of SK Hynix’s market capitalization. Benefiting from the artificial intelligence boom, the company's stock price has more than doubled this year, and its market capitalization has exceeded US$1 trillion, while it remains unfazed by global volatility in the chip sector.
According to the plan, ADR pricing will be completed by Thursday afternoon New York time, finalized before the opening of the South Korean stock market and the official listing of the ADR on the Nasdaq Global Select Market on Friday.
Due to restrictions in the mechanism for converting ordinary shares listed in South Korea into ADRs, which may limit arbitrage opportunities, the ADR is expected to trade at a premium.
The joint lead underwriters include investment banks such as Bank of America, Citigroup, Goldman Sachs, and JPMorgan Chase.
Additionally, Baillie Gifford, Coatue Management, and Situational Awareness Partners have expressed their intention to subscribe, with the three institutions collectively aiming to purchase up to approximately US$7 billion worth of ADRs in this initial offering.
