Postal Sav­ings Bank IPO seeks up to $8.1 bil­lion


Postal Sav­ings Bank of China Co is seek­ing as much as $8.1 bil­lion in a Hong Kong ini­tial pub­lic of­fer­ing start­ing on Wed­nes­day, which could be­come the world’s big­gest share sale this year.

The Bei­jing-based bank is of­fer­ing 12.1 bil­lion shares at HK$4.68 ($0.6) to HK$5.18 apiece, the bank said on Tues­day evening. Cor­ner­stone in­vestors, who com­mit to hold their shares for six months, agreed to buy about $5.9 bil­lion of stock, ac­count­ing for 76 per­cent of the of­fer­ing at the mid­point of the mar­keted range.

The price range val­ues Postal Sav­ings Bank at about 1 to 1.1 times its net as­sets at the end of March this year, a per­son with knowl­edge of the mat­ter said, ask­ing not to be iden­ti­fied as the in­for­ma­tion is pri­vate. Main­land lenders listed in Hong Kong trade at a me­dian 0.88 times their lat­est book value, data com­piled by Bloomberg show.

“Even though there are some pos­i­tives for Postal Sav­ings Bank, the val­u­a­tion is not at­trac­tive enough,” Ed­mond Law, an an­a­lyst at UOB Kay Hian (Hong Kong) Ltd, said. In­vestors may pre­fer the shares of other listed State-owned banks due to their more at­trac­tive price-to-book ra­tios, Law said.

Even at the bot­tom end of the price range, Postal Sav­ings Bank’s first-time share sale would be the largest glob­ally this year, sur­pass­ing the $3 bil­lion of­fer­ing from Dan­ish util­ity Dong En­ergy A/S in June, ac­cord­ing to data com­piled by Bloomberg. The IPO is set to be the largest glob­ally since e-com­merce bil­lion­aire Jack Ma’s Alibaba Group Hold­ing Ltd priced its $25 bil­lion New York share sale in Septem­ber 2014, the data show.

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