Chinese e-commerce giant Alibaba is looking to raise around $13 billion through a secondary listing on the Hong Kong stock exchange, people with knowledge of the matter told TechNode on Wednesday.

Why it matters: The company’s long-expected secondary listing could be the world’s largest issuance this year and the largest one for the Hong Kong market since 2010.

  • The potential listing would make Alibaba shares available to Chinese investors who are also users of the e-commerce platform.
  • A dual listing in New York and Hong Kong would allow the shares to be traded on a full-day cycle, reflecting investor sentiment in real time.

Details: The company will offer 500 million newly issued shares through the Hong Kong listing, according to its prospectus filed with the SEC.

  • The offering includes a greenshoe option, allowing underwriters to buy an extra 15% of shares from the issuer at the offer price good for a few days after the initial offering, the source said. If the greenshoe option is exercised, the offering will dilute the interest of existing ordinary shares by 2.8%.
  • At Alibaba’s current share price of around $186 apiece, the initial public offering (IPO) could raise around $13 billion.
  • Alibaba hopes to set the IPO price on Nov. 20, the people said.
  • Alibaba gained approval from the Hong Kong stock exchange’s listing committee on Tuesday and is kicking off a week-long roadshow on Wednesday, according to the South China Morning Post.

Context: Alibaba’s business-to-business entity went public on the main board of the Hong Kong stock exchange in 2007, but delisted in 2012.

  • When preparing for a relisting in 2013, Alibaba choose the New York Stock Exchange over Hong Kong so it could offer a dual-class share structure, although founder Jack Ma has commented publicly on multiple occasions that company remains open to a Hong Kong listing.
  • The Hong Kong stock exchange began allowing companies to list with dual-class shares in April 2018, opening the door for tech firms to have share classes with different voting rights.
  • The company had earlier received shareholders approval to split its ordinary shares on a one-to-eight basis, increasing its capital base to 32 billion shares from 4 billion.

Correction: includes a correction about the interest dilution from greenshoe option, which would be 2.8% of existing ordinary shares, not a total of 2.8 million additional shares.

Emma Lee is Shanghai-based tech writer, covering startups and tech happenings in China and Asia in general. We are looking for stories related to tech and China. Reach her at More by Emma Lee

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