China Literature IPO raises US$1.1 billion

HONG KONG: An IPO for China Literature, Tencent Holdings’ online publishing arm, has raised US$1.1 billion (RM4.6 billion) with the retail portion gathering demand that was 625 times the number of shares on offer, setting the stage for a sterling debut today.

The offering for China’s biggest e-book company priced at the top of its marketed range of HK$48HK$55 (RM26-RM30) range, Tencent said in a statement, confirming a report from Thomson Reuters IFR last week.

Tencent added that the international portion of the offering was “very significantly over-subscribed”.

“A hefty gain is expected, with the grey market price shooting as high as HK$77,” said Steven Leung, a sales director at UOB Kay Hian brokerage in Hong Kong. That represents a jump of about 40% over its IPO price.”

China Literature, which is 62% owned by Tencent, has a business akin to Amazon.com Inc’s Kindle Store, operating a platform with 9.6 million literary works from 6.4 million authors.

Private equity firm Carlyle Group LP owns 12.2% of China Literature while Trustbridge Partners holds 6%.

The listing comes some six weeks after the debut of ZhongAn Online Property & Casualty Insurance Co, which jumped 18% on its first day of trade and is now up almost 30% over its IPO price, boosting Hong Kong’s hopes of luring future Chinese technology start-ups .

Razer Inc, a gaming hardware maker backed by Intel Corp and Hong Kong billionaire Li Ka-shing, has priced its IPO near the top end of the range, raising HK$4.12 billion, IFR reported on Tuesday. – Reuters