Ant to raise US$34.5b as world-beating IPO opens

Top News | Bloomberg and Avery Chen 27 Oct 2020

Ant Group opens retail books for its mega dual listing today, pricing Hong Kong shares at HK$80 apiece with a minimum investment of HK$4,040.31 per board lot of 50 shares.

The fintech giant priced its Shanghai stock at 68.80 yuan (HK$79.46) each.

Ant is valued at between US$280 billion (HK$2.18 trillion) and US$460 billion.

It will raise about US$34.5 billion in total from Shanghai and Hong Kong before exercising its green-shoe option, which would be the largest IPO in the world, its filings showed yesterday.

The company may raise another US$5.17 billion if it exercises its Hong Kong and Shanghai green-shoe options.

That would give Ant a valuation of about US$320 billion, making it bigger than JPMorgan and four times larger than Goldman Sachs.

In Hong Kong, Ant is offering 1.67 billion H shares to raise HK$133.6 billion, the same amount as the Shanghai offering.

Only 2.5 percent, or 41.77 million H shares, is available for retail investors.

But if the retail tranche is oversubscribed by 10-15 times, that will trigger a claw-back mechanism that will raise the portion to 5 percent of the total offering.

And if the deal is oversubscribed by 15-20 times it will increase the number of shares to 7.5 percent of the total. And if oversubscribed by more than 20 times, it will increase total shares to 10 percent.

Ant's market debut will be on November 5, after the US vote on November 3, an event that could spark market volatility if the vote is disputed or counting delayed.

Ant will be listed in Shanghai under the ticker "688688" and in Hong Kong under "6688." The mega IPO has tightened market liquidity. The Hong Kong Monetary Authority yesterday sold another HK$3.1 billion to defend the currency peg.

The aggregate balance, the key gauge of cash in the local banking system, is set to rise to HK$417.83 billion.

The HKMA has injected more than HK$30 billion since last Friday.

Ant has picked China International Capital Corp and CSC Financial to lead its Shanghai leg of the IPO. CICC, Citigroup, JPMorgan and Morgan Stanley are heading the Hong Kong offering.

Existing Ant shareholders won't be able to sell shares for six months, according to the filings.

In the preliminary price consultation of its Shanghai IPO, institutional investors subscribed for more than 76 billion shares, or over 284 times the initial offline offering tranche, said Ant's A share offering announcement.

Alibaba Group, which was cofounded by Jack Ma Yun and owns about a third of Ant, has agreed to subscribe for 730 million of the Shanghai shares, the prospectus says. Alibaba will hold about 32 percent of Ant shares after the IPO.

In other news, Sunac Services, a property management arm of Sunac China, has passed a listing hearing with Hong Kong Stock Exchange, aiming to raise as much as US$1 billion.

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