HONG KONG (BLOOMBERG) – Alibaba Group Holding has agreed to subscribe to more than a fifth of Ant Group’s imminent initial public offering, propping up its part-owned fintech giant’s potentially US$35 billion (S$48 billion) debut.
Asia’s largest corporation will buy 730 million of about 1.67 billion Shanghai-listed A shares as part of a placement to strategic investors, the e-commerce giant said in a stock exchange filing on Thursday (Oct 22). Including the Hong Kong tranche of its IPO, Ant intends to sell a total of 3.3 billion shares. In addition, the financial services giant plans to issue about 1.16 billion Hong Kong-listed or H shares to Alibaba, part of a distribution of about 3.26 billion shares to existing backers.
Alibaba co-founder Jack Ma’s Ant Group is racing towards what could be the world’s largest ever coming-out party, slated for sometime over the coming weeks. The IPO is said to have drawn strategic investors including Singapore’s sovereign wealth fund GIC, Temasek Holdings and China’s US$318 billion National Council for Social Security Fund.
That strong demand means the Alipay operator could fetch a valuation of at least US$280 billion, despite concern that people within the Trump administration are exploring restrictions on the Chinese fintech giant, according to people familiar with the matter.
Ant reported a 74 per cent jump in gross profit to 69.5 billion yuan (S$14.2 billion) from January to September, according to an A-share prospectus posted to the Shanghai exchange.