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Alibaba may raise IPO size in US
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ALIBABA Group Holding Ltd plans to increase the size of its US initial public offering because of “overwhelming” investor demand, people familiar with the deal said yesterday.
The Chinese e-commerce company launched the IPO last week and had enough investor demand to cover the entire deal within two days, people familiar with the process said last week.
Alibaba could set a new record for the world’s biggest IPO if underwriters exercise an option to sell additional shares to meet demand, pushing it as high as US$24.3 billion and overtaking the Agricultural Bank of China’s US$22.1 billion listing in 2010.
The company and some shareholders offered 320.1 million American depositary shares at a US$60-66 per share indicative range. Alibaba will likely file an amendment to its IPO with a higher price range after discussing the new price with large US mutual funds and institutional investors, one of the people said.
“Demand has been overwhelming since the launch,” said the person, who couldn’t be named because details of the IPO aren’t yet public. “Increasing the price range was already on the cards from the beginning.”
Bloomberg News earlier reported that Alibaba plans to increase the top end of the price range to above US$70.
Alibaba spokeswoman Florence Shih declined to comment on the size of the IPO being raised.
Reuters said last Friday that Alibaba plans to close its IPO order book early after it received enough orders to sell all the shares in the record-breaking offering.
Alibaba plans to expand its business in the United States and Europe after the much anticipated IPO, billionaire founder Jack Ma said yesterday in Hong Kong as the Chinese e-commerce titan pitched its record deal to investors in Asia.
“After being listed in the US, we will develop our business in Europe and in the US,” Ma told journalists ahead of his presentation to investors.
“We will not give up the Asia market because, as I would say, we are not a company from China, we are an Internet company that happened to be in China.”
Alibaba picked New York for its IPO after Hong Kong officials rejected its request to allow a small group of company insiders to nominate the majority of its board.
The company is expected to price the deal on September 18. It will start trading a day later.
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