Major Hong Kong developers plan to buy into the initial public offering from Shanghai Forte Land, lending their support to the mainland company's $1.5 billion listing.
Sun Hung Kai Properties (SHKP) and Cheung Kong (Holdings) were among those that had expressed strong interest in the offer, a source close to the deal said.
'Other than Cheung Kong and SHKP, the company is in talks with a number of firms,' she said. 'I believe eventually more than two companies will take a share in Shanghai Forte in anticipation of the growing property market in Shanghai.'
Details would be finalised tomorrow when the offer price is fixed. A spokesperson at Cheung Kong said the company was considering buying into the IPO of the biggest private developer in Shanghai. SHKP was unavailable for comment.
Shanghai Forte hopes to raise up to $1.5 billion through a listing on the main board. It plans to sell 638.3 million H shares between $1.80 and $2.35 each for an estimated price-earnings multiple of nine to 11.8 times last year's earnings. The company originally set a range of $1.60 to $2.20 per share.
Another source said the Hong Kong developers would not be considered strategic investors should they buy a stake and would not be subject to any lock-up period.Peggy Sito