SPG Land (Holdings), a Shanghai developer, plans to sell as much as 10 per cent of the company to the Kadoorie family during its HK$1.195 billion initial public offering in a bid to strengthen their relationship, sources familiar with the deal said.
They said the Kadoorie family had agreed to buy 'a significant stake' in SPG Land even before the firm began taking orders from institutional investors last month.
The Kadoories will eventually buy at least 5 per cent but not more than 10 per cent of SPG Land's enlarged issued share capital, or 20 million to 40 million shares, from the share sale, the sources said.
SPG Land priced its 250 million shares on offer at HK$4.78 each, near the top end of the indicative range of HK$4.28 to HK$4.90.
The final price is 13.5 times the developer's forecast earnings this year and at a 32 per cent discount to its net asset value per share. The shares will make their trading debut on the Hong Kong stock exchange on Tuesday.
The retail portion of the offering will be increased to 40 per cent from the initial 10 per cent of the total shares for sale after retail investors placed orders 88 times more than the number of shares earmarked for them.
The institutional tranche was more than 20 times oversubscribed.