IPO as easy as ABC for investors
By Michael Flaherty and Kennix Chim |
00:10 UTC+8 June 11, 2010
|
Print Edition
Print Edition
THE Agricultural Bank of China is close to signing up a list of cornerstone investors, including Singapore's Temasek and Qatar's sovereign fund, for its roughly US$20 billion Hong Kong and Shanghai initial public offering, sources involved with the deal said yesterday, with the bank hoping to get a one year lock-up commitment.
Cornerstone investors for ABC's Hong Kong-listed H-share offering are expected to invest between US$100 million and US$1 billion each, the sources said. Interested sovereign funds, which also include Kuwait and China Investment Corp, are in talks to buy up shares worth closer to the US$1 billion mark.
So-called cornerstone investors are important to the success of an IPO and in this case could prove critical to the IPO, as the deal is racing against a falling stock market.
These investors agree to buy into the IPO before the pre-marketing period, allowing the underwriters to show potential institutional investors that the deal already has solid financial backing. In return, cornerstones receive preferential shares.
ABC's underwriters are in talks to sign up around 20 cornerstone investors, the sources said, with the final list expected to be wrapped up this weekend.
The Hong Kong stock exchange listing committee gave its approval to the IPO yesterday, a day after Chinese mainland's regulators gave the deal the green light, one source said.
If ABC raises over US$23 billion, it will be the world's largest ever IPO.
Cornerstone investors for ABC's Hong Kong-listed H-share offering are expected to invest between US$100 million and US$1 billion each, the sources said. Interested sovereign funds, which also include Kuwait and China Investment Corp, are in talks to buy up shares worth closer to the US$1 billion mark.
So-called cornerstone investors are important to the success of an IPO and in this case could prove critical to the IPO, as the deal is racing against a falling stock market.
These investors agree to buy into the IPO before the pre-marketing period, allowing the underwriters to show potential institutional investors that the deal already has solid financial backing. In return, cornerstones receive preferential shares.
ABC's underwriters are in talks to sign up around 20 cornerstone investors, the sources said, with the final list expected to be wrapped up this weekend.
The Hong Kong stock exchange listing committee gave its approval to the IPO yesterday, a day after Chinese mainland's regulators gave the deal the green light, one source said.
If ABC raises over US$23 billion, it will be the world's largest ever IPO.
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