News

Alibaba-and-the-15-billion-dollar question is: in the Middle of Hong Kong’s protests, where is the list?

HONG KONG (Reuters) – Hong Kong’s political turmoil and is posing a dilemma for the Alibaba Group Holding Ltd (BABA).(N) at the timing of a planned us $15 billion in a listing in the city, sources say, China is the world’s largest e-commerce company is currently considering various timescales.

FILE PHOTO: the logo of Alibaba Group is seen at an exhibition during the World Intelligence Congress in Tianjin, China-May 16, 2019 at the latest. (REUTERS photo/Jason Lee/File Photo

The New York-listed Alibaba is likely to launch the offer, the potential of the world’s largest event of the year – as early as the third quarter, the sources said, and at the end of August, after a first-quarter profit, as it was generally considered to be the most likely window.

In preparation for the huge demand, bankers as well as advising on other big deals in Hong Kong have to be careful to ensure that they can plan their launches around that time of the year, for fear that a collision from the timing, it would crowd out their services.

But not a word was mentioned by any of the Alibaba in Hong Kong, an indication of when it’s released estimate-beating profit on Thursday and also the demand in the hour-long meeting with analysts after the results.

Two sources involved in the deal, and the other is informed about the Alibaba discussions of the company to consider the deal as a “fluid” and said that Alibaba is the title of several calendars.

Alibaba declined to comment.

The Hong Kong list and the deal has been estimated at up to $ 20 billion, but it is more likely, according to sources close to the agreement will be increased from $10 to$15 billion.

The odds were always expected to be a complex process, because of China’s strict controls on cross-border share of trade in Hong Kong’s unrest has taken on the complexity of a number of notches higher.

For more than 10 weeks of clashes between police and pro-democracy protestors into Hong Kong’s worst crisis since its return to Chinese rule in 1997, and was presented by President Xi Jinping and his greatest popular challenge since taking power in 2012.

Tear gas is often used by the police, while more than 700 people were arrested.

This week, the protesters effectively shut the city’s airport on two consecutive days in a row, and the disruption of tens of thousands of passengers, and the provision of a practical problem a company is considering the launch of a ” deal roadshow in Hong Kong, china. [nL4N2595MG]

Under certain circumstances, when Alibaba lists, it is of paramount importance as it sends a signal to the rest of the world, the state of Hong Kong as a commercial and financial center, and it offers a window into China’s version of the situation.

“What do you think of Beijing feel about the show in Hong Kong, a $15 billion gift, as it is now?” he asked, a capital markets professional will not be involved in, the Alibaba deal.

A MARKET HOPES

For a list, Alibaba is a big deal for Hong Kong, which loosened rules last year designed to entice overseas-listed Chinese tech behemoths to be in the list, to be closer to home.

Alibaba could be the first test of the new system.

Early in this week, whether in Hong Kong anxiety of influence, it would have been in the Hong Kong stock exchange chief executive Charles Li also avoided a direct recognition of the company’s application, which is still technically confidential. [nL4N23K1SW]

But Li added: “I am confident that businesses such as that, in the end it will find a home here, and because of this, it is at home, and I think they will come out. I don’t know if that’s true.”

Alibaba’s Hong Kong listing is subject to China, who has been working in order to provide mainland investors to play a greater role in the financing of the country’s fast-growing tech sector.

Government officials are aware of the fact that the capital controls as well as the AMERICAN stock exchange listing preferred by the majority of China’s first generation of the tech giant imply that international shareholders have benefited far more from their successes than for local investors.

Mainland investors can buy Hong Kong stocks through so-called Stock Connect, which allows investors in Shanghai and Shenzhen and Hong Kong to trade shares listed on each others stock exchanges.

However, the inclusion of Alibaba’s Hong Kong-shares in a Stock, it is guaranteed, because the control does not allow the mainland to buy from the companies that have weighed on their vote in favor of the member, such as a smartphone maker, Xiaomi (to 1810.HK), and Meituan Dianping (3690.HK), an online food-delivery-to-day ticketing operation. Both took advantage of last year, another Hong Kong’s rule change in order to float it in Hong Kong, with weighted voting rights structures.

While Alibaba has a single class of shares with equal voting, the board of directors, it is not the norm, as the board of directors is controlled by a self-selecting group of company insiders.

Chinese regulators said that they will allow local investors to engage in trade, with a weighted right to vote, but do not yet have a date for you to do so. [nL4N24Y3CF]

A TECHNICAL HURDLE

Alibaba, in a deal that also need to overcome another technical hurdle: it needs to gain the approval of the city, and the statement of the committee of the 27-strong independent group of industry professionals whose consent is required for all first-time share sale.

The company has been in discussions with the commission, but has not yet appeared before the group at one of the regular Thursday public hearings for the formal adoption, on the basis of three main sources.

So far, only Credit Suisse and CICC, the Chinese investment bank, have been awarded a contract for the mega-list, the sources said, although several other banks have been jockeying to play a role in the deal, they added.

All to be expected, I really thought that the appropriate level of care, the promotion thereof, having regard to the size of the deal, and the political and market considerations.

As a senior banker not involved in this, and said it did not want to move too fast.

“Why would Alibaba rush to the kick-off?”, we didn’t care.

Reporting by Julie Zhu and Jennifer Hughes in Hong Kong; Additional reporting by Gregory Roumeliotis in New York; Editing by Muralikumar Anantharaman

Follow us

Don't be shy, get in touch. We love meeting interesting people and making new friends.

Most popular