Alibaba plans US$20 billion blockbuster Hong Kong listing

HONG KONG: Alibaba is considering raising as much as US$20 billion through a listing in Hong Kong, people familiar with the matter told Reuters, lining up a second blockbuster deal following its 2014 record US$25 billion float in New York.

The deal, the biggest follow-on share sale in seven years globally, would give Alibaba a war chest to keep investing in technology – a priority for China as growth flags and as the world’s second-largest economy faces a mounting trade spat with the United States.

The e-commerce giant is working with financial advisers on the offering and is aiming to file an application confidentially in Hong Kong as early as the second half of 2019, three people said on condition of anonymity as the plans are not public yet.

They cautioned that many details were not clear, including the final planned size. One person with direct knowledge said it was more likely to be between US$10 billion and US$15 billion.

At US$20 billion, Alibaba’s deal would be the sixth-biggest follow-on share sale ever, Refinitiv data shows, ranking behind NTT’s 1987 US$36.8 billion sale, crisis era offerings of US$24.4 billion and US$22.5 billion from the Royal Bank of Scotland and Lloyds Banking Group, as well as the US$20.7 billion raised by U.S. insurer AIG in 2012.

A spokesman for Alibaba declined to comment.

SoftBank Group, Alibaba’s largest investor, did not immediately respond to a request for comment.

The Japanese tech investor has a 28.8per cent stake, worth US$115.7 billion, in Alibaba after it sold a small part of its original holding via derivatives to fund its acquisition of chip designer ARM in a transaction that completes next month.

SoftBank founder and CEO Masayoshi Son is a close friend of Alibaba founder Jack Ma.

Bloomberg was the first to report the plan for a Hong Kong listing. (https://bloom.bg/2YRpEdi)

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