Everbright in hunt for more key investors
Source: Bloomberg News |
July 23, 2011, Saturday
|
Print Edition
Print Edition
CHINA Everbright Bank is seeking more institutional buyers for its Hong Kong share sale after getting commitments for about a third of the offering from key investors, sources said yesterday.
Prudential and United Overseas Bank are among 12 so-called cornerstone investors that have agreed to buy about 30 percent of the 10.5 billion shares on offer, the sources said. The sale may raise about US$5.3 billion, based on the lender's closing price of 3.28 yuan (US$0.51) in Shanghai on Thursday.
Everbright's underwriters want to sell at least 40 percent of the stock to cornerstone investors, the sources said. Such buyers - typically funds, companies or wealthy individuals - are offered guaranteed shares in exchange for pledges not to sell the stock for a fixed period.
The Beijing-based bank delayed the sale in June as shares of Chinese lenders declined on concerns that loans made to local governments may sour. China Guangfa Bank, part-owned by Citigroup, is among other financial companies planning to sell shares in Hong Kong, according to sources. Everbright shares have lost 17 percent this year in Shanghai.
With demand for bank shares slackening, securing key investors may help ensure a deal gets done. The Agricultural Bank of China sold about 52 percent of the Hong Kong portion of its initial public offering to cornerstone investors last year, according to data compiled by Bloomberg News.
Everbright may sell shares at as much as a 5 percent discount to the average trading price in Shanghai in the 10 days leading up to the offering, the sources said. The top end of the price range would represent a 10 percent premium to the 10-day average.
Prudential and United Overseas Bank are among 12 so-called cornerstone investors that have agreed to buy about 30 percent of the 10.5 billion shares on offer, the sources said. The sale may raise about US$5.3 billion, based on the lender's closing price of 3.28 yuan (US$0.51) in Shanghai on Thursday.
Everbright's underwriters want to sell at least 40 percent of the stock to cornerstone investors, the sources said. Such buyers - typically funds, companies or wealthy individuals - are offered guaranteed shares in exchange for pledges not to sell the stock for a fixed period.
The Beijing-based bank delayed the sale in June as shares of Chinese lenders declined on concerns that loans made to local governments may sour. China Guangfa Bank, part-owned by Citigroup, is among other financial companies planning to sell shares in Hong Kong, according to sources. Everbright shares have lost 17 percent this year in Shanghai.
With demand for bank shares slackening, securing key investors may help ensure a deal gets done. The Agricultural Bank of China sold about 52 percent of the Hong Kong portion of its initial public offering to cornerstone investors last year, according to data compiled by Bloomberg News.
Everbright may sell shares at as much as a 5 percent discount to the average trading price in Shanghai in the 10 days leading up to the offering, the sources said. The top end of the price range would represent a 10 percent premium to the 10-day average.
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