PE-backed Haitong Securities raises $1.7b in Hong Kong IPO

Haitong sold about 1.23 billion shares at HK$10.60 apiece, near the bottom of its indicative range, according to a Hong Kong stock exchange filing. It originally offered shares at HK$10.48-11.18. The final pricing values Haitong at about 1.3x its estimated 2012 book value.

PAG is a cornerstone investor in the brokerage's IPO, buying $300 million worth of shares. It is among 11 cornerstone investors that between them pledged to purchase $580 million of the offering. Other participants include DE Shaw, Japan's SBI Holdings and Dah Sing Bank. The deal also got about $500 million in pledges from anchor investors, one source told IFR on Wednesday.

This is Haitong's second attempt at Hong Kong IPO. The brokerage had planned to raise up to $1.7 billion last December, but delayed the listing due to the poor market conditions and disappointing performances by other Chinese financial firms debuting on the Hong Kong bourse. At that time, Warburg Pincus was one of the cornerstone investors, buying $210 million of shares, alongside a unit of Japan's Sumitomo Mitsui Trust Holdings.

Haitong's is the largest offering in Hong Kong since the $1.9 billion dual listing of New China Life Insurance in Hong Kong and Shanghai last December. It is also the second mainland brokerage to list in Hong Kong after CITIC Securities, China's largest securities house, which completed its IPO last October, securing a pricing of 1.7x forward book value.

Haitong's sale is about 40% larger than the total amount raised through IPOs in Hong Kong in the first quarter, Bloomberg reported. The stock will begin trading in Hong Kong on April 27.

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• Topics
• Greater China
• Financials
• Hong Kong (China)
• IPO
• Warburg Pincus Asia
• PAG
• China
• Financial Services