Ant Group: from “scrappy upstart” to king of the hill
An “earth-shaking arthropod” is coming to market, said Lex in the Financial Times. In a “stunning expression of China’s economic vigour and Jack Ma’s business success”, Ant Group is readying itself to stage the world’s largest-ever initial public offering in Shanghai and Hong Kong next week. The $34bn-plus float, which eclipses the $29bn raised last year by the state-controlled Saudi oil giant Aramco, will value the Chinese payments firm (an affiliate of Ma’s e-commerce titan Alibaba) at around $313bn. The move marks an extraordinary double for Ma, a former English teacher, who first broke the record for the world’s biggest IPO when he floated Alibaba in 2014.
Observers report “overwhelming” investor demand for the dual IPO, said Reuters: both the Shanghai and Hong Kong offerings are heavily oversubscribed. “Given the size of the IPO... every man and their dog will be trying to get in,” said
Khoon Goh, of ANZ bank. Cue a fee bonanza for underwriting banks, which include Citigroup, JPMorgan Chase and Morgan Stanley. They won’t be cheering in Riyadh, said Alistair Osborne in The Times. “Beaten by an Ant. How will Mohammed bin Salman take that sort of humiliation?” The Saudi crown prince thought he had the world record in the bag; now he’s been trumped by a “large insect”.
“Excitable investors see Ant as a buzzy internet innovator,” said Raymond Zhong and Cao Li in The New York Times. “More than 730 million people use the Alipay app every month to pay for lunch, invest savings and shop on credit.” But therein lies a problem. The company going public is no longer a “scrappy upstart”, but a “leviathan deeply dependent on the good will of the government Ma once relished prodding”. How much higher can Ant fly “without provoking the Chinese authorities into clipping its wings”?