Alibaba poised to launch record-breaking $13.4 billion HK share sale: sources

HONG KONG (Reuters) – Chinese e-commerce giant Alibaba Group is poised to launch a Hong Kong share sale expected to raise up to $13.4 billion as soon as Thursday, according to two sources with knowledge of the discussions.

While Alibaba executives are preparing for a Thursday launch, sources said the timing could slip depending on developments in Hong Kong’s ongoing protests.

The sources declined to be named because the information was not yet public.

An Alibaba spokeswoman declined to comment on the company’s listing plans.

The deal – the world’s biggest cross-border secondary listing – will be seen as a boost for Hong Kong, which recently entered its first recession in a decade as more than five months of street protests and worries about the U.S.-China trade war took their toll.

The company had been planning to sell the shares earlier this year but in August postponed the deal as the protests rocking Hong Kong since June became increasingly violent.

Another source with knowledge of the listing process said Alibaba was confident that the company could overcome the negative sentiment created in Hong Kong financial markets due to the ongoing protests.

The deal had been initially expected to raise up to $15 billion, but the source said the company would sell up to 500 million primary shares in the listing. Including a typical “greenshoe”, or overallotment option, to sell some extra shares, the sale could raise up to $13.4 billion.

A sale of that size will dilute existing shareholders by 2.8% and investors will be able trade shares between the two exchanges, the source said.

Alibaba will lodge its U.S. regulatory filings and publish a preliminary prospectus for the deal on Wednesday evening on the Hong Kong Stock Exchange website.