Alibaba prices Hong Kong shares at HK$176, a slight discount to its New York shares in world’s biggest IPO of 2019
- Retail portion has been oversubscribed by 40 times, meaning the size is likely to be increased to 50 million shares from 12.5 million, sources said
- Separately, the Hong Kong stock exchange will roll out options and futures contracts for Alibaba shares on its November 26 debut, stock will also be available for short-selling
Alibaba Group Holding will offer the investors of its Hong Kong shares at a slight discount to its US-listed depositary shares, as Asia’s most valuable company prepares to kick off the world’s largest initial public offering this year.
The Hangzhou-based company has priced its secondary stock offering in Hong Kong at HK$176 each based on guidance at the end of a global marketing process, it said in a statement.
A rush for its shares among retail investors is said to have boosted the oversubscription rate to 40 times, locking up a record HK$94 billion for an IPO in the city this year, said the people who declined to be named.
Separately, the Hong Kong Exchanges and Clearing Limited (HKEX), the operator of the bourse, said it would roll out options and futures contracts for the stock when Alibaba makes its trading debut on November 26. The shares can also be available for short-selling.
The offer price works out to about 2.6 per cent discount to Alibaba’s November 19 closing price of US$185.25 in New York. It is also about 6.4 per cent below the indicative ceiling of HK$188 each for retail investors in Hong Kong. Eight Hong Kong-listed shares are worth the equivalent of one New York-listed share.
Based on the pricing the company will raise as much as HK$101.2 billion (US$13 billion) if the full allocation of 575 million shares is taken up, making it the biggest offering globally so far this year.
