Alibaba Sets Per Share Price at HK$176 Ahead of Offering Next Week

Alibaba's offering in Hong Kong, at about $13 billion if the underwriters exercise the over-allotment option, is expected to be the largest this year.

Anthony Russo
    Nov 20, 2019 4:30 PM  PT
Alibaba Sets Per Share Price at HK$176 Ahead of Offering Next Week
author: Anthony Russo   

Alibaba Group Holding Ltd. (NYSE: BABA) has set the offering price ahead of its $13 billion initial public offering in Hong Kong, anticipated on November 26.

The e-commerce giant said in a statement today that it will issue 500 million ordinary shares priced at HK$176 each. That is equivalent to approximately $180 per American depositary share based on the ratio of eight shares per ADS and is a 3% discount from yesterday's close of $185.25 per ADS. The listing will mark the world's largest IPO this year. 

Alibaba completed the world's largest IPO in New York in 2014, raising $25 billion from Wall Street investors.

"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, wrote in a letter to shareholders on Friday.

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 firms jointly underwriting the offering are China International Capital Corporation 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.  The underwriters may purchase up to an additional 75 million shares, the report said.

In its latest filing with the Securities and Futures Commission of Hong Kong, Alibaba said it will use the proceeds from the IPO to help drive user growth and engagement, facilitate digital transformation, improve operational efficiency and continue its innovation.

"To fulfill our mission to make it easy to do business anywhere, we enable businesses to transform the way they market, sell and operate and improve their efficiencies. We provide the technology infrastructure and marketing reach to help merchants, brands and other businesses to leverage the power of new technology to engage with their users and customers and operate in a more efficient way," Alibaba said in its filing.

Last week, Alibaba reported another record sales on China's largest shopping festival, Singles' Day, with gross merchandise volume reaching $38.4 billion.

Alibaba Is set to begin trading in Hong Kong on Nov. 26 under the stock code "9988."

Shares in Alibaba closed nearly 2% lower, at $182.35 per ADS, on Wednesday.