Alibaba Group Holding Ltd. (NYSE: BABA) is deciding between launching a sharply reduced $10 billion Hong Kong share sale in November or delaying the deal till next year as global uncertainty mounts.
Alibaba’s listing would boost Hong Kong’s status as major capital markets hub. The float would be the world’s biggest IPO deal if the equity deal for Aramco is delayed to next year.
China’s largest company is weighing its options for the city’s biggest first-time sale of stock since 2010, but the window for pulling off its mega deal in 2019 is closing fast. It is expected to proceed with a required listing hearing, either after its Nov. 1 earnings or Nov. 11 Singles’ Day shopping gala, or risk postponing a deal altogether till 2020. Alibaba is reluctant to drag things out as uncertainty mounts around U.S.-Chinese tensions and the global macroeconomic outlook.
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Alibaba’s listing was to be the crowning achievement of a Hong Kong stock exchange that lost many of China’s brightest technology stars to U.S. rivals. Instead, pro-democracy and anti-China protests erupted over the summer, rattling the financial hub and hammering mainland-related stocks.
The company is now considering the week after its quarterly earnings release or the country’s largest online retail bonanza as the most likely openings, the people said. Alibaba’s looking to raising closer to $10 billion, about half of an original target. The company can capitalize on the strong recent reception for Hong Kong IPOs, with several companies including Anheuser-Busch InBev NV’s Asian unit raising $1 billion or more.
It “is closer to home, and people are more familiar with its business here, so it could get a good valuation if it listed in Hong Kong,”Julia Pan, a Shanghai-based analyst with UOB Kay Hian.