Alibaba in sight of HK$13.1b on keen demand
Listing candidate Alibaba.com may raise a record HK$13.1 billion after setting its share offer price at the top of the indicative range, with local subscribers and global institutional investors responding overwhelmingly to the sale, sources said yesterday.
The mainland's largest e-commerce portal will raise HK$11.5 billion before exercising an over-allotment arrangement by selling 858 million shares at HK$13.50 after indicating a HK$12 to HK$13.50 price range.
Alibaba.com will raise up to HK$13.1 billion or US$1.69 billion if it exercises the over-allotment option, which will add 113 million shares to the existing 858 million shares on offer. The company, which was founded by Jack Ma in 1999, will pocket net proceeds of HK$2.9 billion from the global offer.
Sources said the deal will be the world's biggest internet stock initial public offering if Alibaba.com exercises the over-allotment option, surpassing Google's record set in August 2004.
Google, the world's largest internet search engine, raised US$1.67 billion or HK$13 billion after reducing the offer size due to the weak market sentiment at that time.
More than 1,200 institutional investors placed orders worth more than US$166 billion for Alibaba.com's shares.
Booking from institutional investors represented an oversubscription of 191 times based on only 75 per cent of 858 million shares allocated, sources said. The institutional amount was cut from 85 per cent previously due to strong response from Hong Kong retail investors.
Local investors subscribed to Alibaba.com shares worth HK$453 billion, beating the record set by shoe retail chain Belle International. In May, Belle froze up HK$453 billion in subscriptions.
'The Hong Kong offering recorded 191 times of oversubscription and this triggered the reallocation of shares between the institutional and Hong Kong tranche,' a source said. 'The Hong Kong tranche now accounts for 25 per cent of the 858 million shares on offer, up from 15 per cent.'
Alibaba.com will announce the basis of allotment of the Hong Kong offering and the international placing on November 5. The shares will debut on November 6.
The company will spend about 60 per cent of the net proceeds for strategic acquisitions and business development and 20 per cent for growing its business in the mainland and internationally.
Goldman Sachs and Morgan Stanley are joint sponsors.