Lenovo to see huge benefits from parent Legend’s expected US$2 billion IPO

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The listing could spell good news for Lenovo CEO Yang Yuanqing (centre) by freeing up funds for Legend to buy more complementary subsidiaries. Photo: AFP

Published: 7:30pm, 16 Jun 2015Updated: 7:45pm, 16 Jun 2015

Lenovo Group, the world's largest supplier of personal computers, could significantly benefit from the upcoming initial public offering in Hong Kong of its parent company, Legend Holdings.

Beijing-based Legend expected its much-anticipated public listing later this month to raise as much as HK$16 billion (US$2 billion).

Net proceeds are estimated to reach HK$14 billion, which Legend plans to spend on new acquisitions and further development of its existing businesses.

The highly diversified investment company has a 30.56 per cent controlling stake in principal subsidiary Lenovo, the shares of which started trading in Hong Kong's main board on February 14, 1994.

"After the IPO, the synergy between Legend and Lenovo will likely be strengthened as the parent firm pursues new investments that may complement Lenovo's prominent computer and smart mobile device businesses," Ricky Lai, a research analyst at Guotai Junan International, said on Tuesday.

Lenovo is currently building up its enterprise and smart mobile devices operations, after last year completing its two biggest acquisitions to date: a US$2.91 billion purchase of Motorola Mobility from Google, and a US$2.1 billion takeover of IBM's x86 server business.