Alibaba.com to announce share price ahead of Hong Kong IPO


  • Business
  • Sunday, 28 Oct 2007

MYT 11:04:05 AM

HONG KONG (AP): E-commerce portal Alibaba.com, one of China's fastest-growing technology companies, was set to announce Saturday the price of its eagerly awaited initial public offering. 

The company has said it hopes to raise up to US$1.5 billion (euro1.04 billion) by selling 858.9 million shares, or a 17 percent stake, in what it called the largest Internet IPO since Google. The shares will debut on the Hong Kong stock market on Nov. 6. 

Alibaba Group, the company that controls the business-to-business commerce Web site, said it plans to offer the shares at a price between HK$12 to HK$13.50 each. Analysts expect the pricing to be at the top end of the range. 

The IPO has drawn huge interest in Hong Kong, with the retail tranche of 128.83 million shares more than 250 times oversubscribed by the end of bookbuilding on Friday, newspaper reports said. 

Alibaba.com had drawn HK$450 billion (US$57.7 billion; euro40.1 billion) in orders for the retail shares, while the institutional tranche had locked up about US$180 billion (euro125.1 billion) in subscriptions, business paper The Standard reported, citing people involved in the deal. 

The underwriters have an option to release an extra 113.67 million shares. 

Analysts said surging demand for Alibaba.com and other shares had pushed up the local currency, prompting the monetary authority - Hong Kong's de facto central bank - to step in for the second time in a week to defend its peg to the U.S. dollar. 

The monetary authority bought HK$775 million worth of U.S. dollars on Friday when the currency reached HK$7.75, the upper limit of the narrow range in which it trades against the greenback. 

It sold a similar amount of Hong Kong dollars on Tuesday. 

Alibaba Group founder, Jack Ma, has said proceeds from the IPO would be spent on strategic acquisitions and development initiatives to grow the company's business both in China and overseas. 

Alibaba.com - whose Web sites allow companies in China and overseas to trade with one another online - is one of China's fastest growing Internet companies. It has seen its registered members soar from 6 million in 2004 to 24.6 million in 2007.  

Paying members increased from 77,000 in 2004 to 255,000 by June 2007. 

Yahoo! Inc., which holds a 39 percent stake in Alibaba.com's parent, Alibaba Group, has agreed to subscribe to about US$100 million (euro69.52 million) worth of shares. 

Alibaba said another seven investors had agreed to take a stake, representing in total about HK$2.3 billion (US$296 million; euro207 million), or 20 percent of the offering.

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