Chinese billionaire Jack Ma’s financial technology firm is aiming to raise more than $34bn (£26.15bn) in the world’s biggest initial public offering, valuing the business at more than $313bn.
Ant Group, which on Monday set the price for its much-anticipated flotation and is expected to start trading early next month, will beat the record $25.6bn sold by state-backed oil giant Saudi Aramco in its flotation last December.
The company, which has decided to bypass US markets, confirmed that it is splitting its shares equally between the Shanghai and Hong Kong stock markets and is seeking to raise about $17.2bn in each city.
The snub of US markets, which are already replete with tech giants from Google and Facebook to Apple and Amazon, is a coup for Asia’s financial centres and comes amid rising political and trade tensions between Beijing and Washington. Donald Trump’s administration has proposed legislation that could force Chinese companies to delist from US markets if they refuse to provide regulators with access to their audit reports.
Trump is in the process of attempting to force hugely popular video sharing site TikTok, owned by private Chinese company ByteDance, to sell its US operation to an American owner or face being shut down. He claims it is a potential threat to national security as the Chinese government could get access to user data, an accusation the TikTok’s parent company denies.
The Trump administration has also put a ban on products and equipment from Huawei, the Chinese technology company heavily involved in mobile phone networks around the world. In July, it emerged that pressure from the US government was part of the reason the UK performed a U-turn and banned Huawei from being involved in the rollout of Britain’s 5G mobile phone network.
Ant, which is on track to raise more than the $25bn its former parent Alibaba Group managed in its flotation in 2014, is expected to start trading on 5 November on Hong Kong’s technology focused Star market. The company has not disclosed when its shares will begin trading in Shanghai. Alibaba, via its subsidiary Zhejiang Tmall Technology, has agreed to buy 730m A-shares to maintain its approximately 33% stake in Ant Group.
The financial technology company is controlled by Alibaba’s billionaire founder Ma, who stepped down as chairman of the e-commerce giant on his 55th birthday last September. Ma, who started Alibaba in a one bedroom flat 21 years ago, has pledged to reduce his direct and indirect stakes in Ant Group to 8.8%. Ma is China’s richest man and the 17th richest person in the world, with an estimated $61bn fortune, according to the Bloomberg Billionaires Index.
Ant runs Alipay, one of China’s two biggest mobile payment platforms, as well as other financial technology services including the Sesame Credit personal credit rating system. The company earned 18bn yuan (£2.1bn) in profits last year. China has roughly 460 million people without formal bank credit histories. Alipay has more than 700 million monthly active users, with payment volumes reaching more than 118tn yuan in China.
Ant is selling 3.34bn shares in the flotation, accounting for 11% of the group’s total outstanding stock. The Shanghai-listed shares will be priced at at 68.8 yuan each, and the Hong Kong shares at $80 each. Ant could raise up to a maximum of $5.2bn more, if the flotation proves popular and underwriters exercise an option to purchase up to 15% more shares.
On Sunday, Chinese media reported that Ant Group had bought a 2.7bn yuan plot of land to build another office building in Hangzhou, where the company is headquartered.
Ant’s pricing details follow regulators in mainland China and Hong Kong giving a green light for the listing last week.
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