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The company, which is controlled by Alibaba founder Jack Ma, has already announced that it intends to evenly split the issuance of shares between the Shanghai and Hong Kong stock exchanges, and to issue 1.67 billion new shares in each exchange.
Shares in Shanghai will be priced at 68.8 yuan ($ 10.28) each, so the issuance of 1.67 billion shares will raise 114.94 billion yuan ($ 17.23 billion), according to documents submitted prior to the IPO. In an issue in Hong Kong, the pricing is Hong Kong $ 80 ($ 10.32) per share, so the amount raised could be Hong Kong $ 133.65 billion ($ 17.24 billion).
This means that the total issue on both exchanges will raise a little less than $ 34.5 billion. The amount may even increase if they exercise the option to sell more shares than planned (over-allotment option). Accordingly, this is expected to be the largest IPO in history, surpassing the IPO of Saudi oil company Aramco, which has raised just over $ 29 billion.
Annette Group’s valuation based on pricing will be $ 313.37 billion, higher than the value of some of the largest US banks, including Wells Fargo and Goldman Sachs.
Annette Group is expected to start trading in Hong Kong on November 5, according to the documents. The company has not revealed when it will start trading in Shanghai.
The company has already revealed that strategic investors have agreed to purchase 80% of the shares to be issued in Shanghai. For example, Alibaba through its subsidiary Zhejiang Tmall Technology has agreed to acquire 730 million shares. As a result, Alibaba will be able to maintain a holding of around 33% in the company.
Pricing was made possible after regulators in China and Hong Kong approved the issues last week. “It has been a good year for first issues in Asia, but it will be hard to miss and everyone seems to believe that the issue will continue to be a success in further trading,” Hong Kong bank financial adviser Philipp Espinasa responded to the Financial Times.
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