Baidu Targets $3.1B Hong Kong Offering, Set For March 23 Trading: Bloomberg

Baidu Inc BIDU is set to raise about $3.1 billion (HK$23.9 billion) from 95 million Hong Kong share sales, Bloomberg reports.

  • Baidu waited for the relaxation in tech share volatility to join a bevy of U.S.-listed Chinese companies getting listed in Hong Kong, led by Alibaba Group Holding Ltd BABAAutohome Inc ATHM. Other potential listers include Tencent Music Entertainment Group TME and Bilibili Inc BILI.
  • The company intended to price the offering at HK$252 per share, representing a 2.7% discount to the Tuesday closing price of $266.78. One American depositary share was equivalent to eight ordinary shares being listed in Hong Kong.
  • The retail tranche of the deal, which was worth 5% of the total share sale, was oversubscribed about 100 times. At that rate, 12% of the deal would be sold to those retail investors under Hong Kong’s clawback rules. Online broker Futu recorded 90,000 subscriptions from investors to borrow HK$14.7 billion in margin loans.
  • Baidu’s listing was touted as the biggest homecoming of a U.S.-traded Chinese company in Hong Kong at HK$23.9 billion, since NetEase Inc’s NTES HK$24.3 billion June 2020 offering. The trade war further fueled such expansion sprees by the U.S. listed Chinese technology companies driving the listing volumes for Hong Kong’s bourse.
  • Bank of America, CLSA, and Goldman Sachs are joint sponsors of the offering, with China International Capital Corp., UBS Group, and CCB International Holdings as joint global coordinators.
  • Baidu’s shares are estimated to start trading in Hong Kong on March 23.
  • Price action: BIDU shares traded lower by 2.77% at $259.4 in the premarket session on the last check Wednesday.
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