Chinese tech giant Baidu could raise $3.6 billion in Hong Kong listing this month
By Hemanth on Mar 14, 2021 | 04:34 AM IST
·
Baidu will raise $3.6 billion in an upcoming Hong Kong secondary listing
if it prices shares at the upper end of their range.
·
Baidu will issue 95,000,000 Class A ordinary shares priced at no more
than 295 Hong Kong dollars or $38.05.
· Baidu joins a long list of Chinese tech companies that are currently listed in the U.S. and that have done secondary offerings in Hong Kong, including Alibaba, JD.com and NetEase.
BAIDU, INC. [BIDU] will raise $3.6
billion in an upcoming Hong Kong secondary listing if it prices shares at the
upper end of their range.
On
Thursday, the Nasdaq-listed Chinese technology giant released its prospectus
for the Hong Kong listing. Baidu will issue 95,000,000 Class A ordinary shares
priced at no more than 295 Hong Kong dollars or $38.05.
At that top end,
Baidu’s net proceeds from the offering will be 27.6 billion Hong Kong dollars
or $3.6 billion.
The
banks underwriting the listing also have the option to purchase up to
14,250,000 more shares. That would take net proceeds from the deal to 31.8
billion Hong Kong dollars, or $4.1 billion.
Final
pricing for the shares will partly be determined by the price of Baidu’s
U.S.-listed shares on the last trading day before the pricing of the global
offering, which is expected to be on or about Mar. 17, the company said.
Earlier
in the day, CNBC reported Baidu will raise at least $3 billion, citing two
people familiar with the matter. The listing will be completed before the end
of the month, they said. Baidu declined to comment when contacted by CNBC.
Baidu joins a long
list of Chinese tech companies that are currently listed in the U.S. and have
done secondary offerings in Hong Kong. They include Alibaba, JD.com and NetEase.
CNBC reported in January that Chinese video streaming company Bilibili has also
filed for a Hong Kong secondary listing.
These listings have
transformed the Hong Kong stock exchange into an attractive place for Chinese
tech companies to raise capital.
Meanwhile, tensions between the
U.S. and China have pushed some Chinese firms to look at secondary listings
closer to home. In December, former U.S. President Donald Trump signed
legislation that threatened to delist firms that do not comply with American auditing
standards.
Diversification plans
Baidu could also be
taking advantage of a huge 128% rise in its shares in the last 12 months in
order to raise capital.
While it has traditionally been
known for its search and advertising business, Baidu has more recently looked
to diversify.
The company has been focusing on
its autonomous car business and is setting up standalone companies. CNBC
reported in February that Baidu is looking to raise money for an artificial
intelligence semiconductor company.
Baidu also set up a standalone
electric vehicle business with automaker Geely and is raising money for a
biotechnology company.
The company said it
would use the proceeds from the Hong Kong listing to invest in technology and
boost the commercialization of its artificial intelligence products, enhance
and diversify monetization, and for general corporate purposes.