Alibaba Announces Expected Pricing for Hong Kong IPO

Alibaba plans to sell 500 million newly issued ordinary shares at the maximum price per share of HK$188.

Anthony Russo
    Nov 15, 2019 5:50 PM  PT
Alibaba Announces Expected Pricing for Hong Kong IPO
author: Anthony Russo   

The stock in Alibaba Group Holding Ltd. (NYSE: BABA) closed 2% higher on Friday, at $185.49 per American depositary share, after it officially announced the launch of its secondary $13.4 billion offering in Hong Kong.

The e-commerce giant said in a statement today that it plans to sell 500 million newly issued ordinary shares. Of those, 12.5 million will be offered on the Stock Exchange of Hong Kong and the rest - 487.5 million - will be offered internationally. The maximum price per share is HK$188, according to the report.

The underwriters on Alibaba's IPO may purchase up to an additional 75 million shares.

In a filing on Wednesday with the U.S. Securities and Exchange Commission, Alibaba said the firms jointly underwriting the global offering are China International Capital Corp. Hong Kong Securities Ltd., Credit Suisse (Hong Kong) Ltd., Citigroup Global Markets Asia Ltd., J.P. Morgan Securities (Asia Pacific) Ltd. and Morgan Stanley Asia Ltd.

In 2014, Alibaba conducted the world's largest IPO in New York, raising $25 billion.

"When Alibaba Group went public in 2014, we missed out on Hong Kong with regret. Hong Kong is one of the world's most important financial centers," Daniel Zhang, the chairman and chief executive officer of Alibaba, said in a letter to shareholders today.

He added, "Over the last few years, there have been many encouraging reforms in Hong Kong's capital market. During this time of ongoing change, we continue to believe that the future of Hong Kong remains bright. We hope we can contribute, in our small way, and participate in the future of Hong Kong."

The Hong Kong IPO will mark one of Alibaba's largest moves since its former chairman, Chinese billionaire Jack Ma, stepped down.

Earlier this week, Alibaba reported another record sales on China's biggest shopping festival, Singles' Day. Its gross merchandise volume reached $38.4 billion in 24 hours on Nov. 11.

Alibaba will set the final offer price by Nov. 20 Hong Kong time, CNBC reported.