Alibaba Group Holding Ltd has raised about HK$88 billion ($11.2 billion) in its Hong Kong share sale, marking the biggest equity offering in the financial hub since 2010.
The company confirmed that it has priced 500 million new shares at HK$176 each in a statement. The price represents a 2.9% discount to the last close of Alibaba’s American depository shares in New York, with each equal to eight ordinary shares of the internet company. This Hong Kong share sale is also one of the largest globally this year.
The mega share sale comes as Hong Kong’s economy has been hurt by months of increasingly violent protests and growing anti-China sentiment. Alibaba’s return will please Chinese officials who’ve watched many of the country’s largest private firms flock overseas for capital. With a Hong Kong listing in sight, Alibaba will challenge Tencent Holdings Ltd for the title of the largest listed corporation in the city.
Alibaba has allocated more shares for individual investors, raising the ratio to 10% from 2.5% of the total offering, people familiar with the matter said, who asked not to be identified as the details are private. The company has an over-allotment option to sell an additional 75 million shares.
The firm is planning to have its shares start trading from November 26 on the Hong Kong exchange under the ticker 9988. Eight is an auspicious number in Chinese culture.
Hong Kong is no stranger to Alibaba as the tech giant once listed its business-to-business platform in the city in 2007. Shares of Alibaba.com tripled at debut on overwhelmingly strong investor demand for technology companies. The enthusiasm didn’t last and the stock plunged later. Alibaba took the platform private in 2012 at HK$13.5 each, which was the IPO offer price five years earlier.
In 2014, Alibaba listed its shares in New York in the biggest ever initial public offering. After losing some of China’s brightest technology stars, Hong Kong started looking into allowing dual-class shares.