Alibaba Health has secured $1.3 billion in Hong Kong’s largest secondary share sale in five years.
The Chinese company, an arm of internet retail giant Alibaba Group, said it issued 499 million new shares priced at HK$20.05 ($2.59) apiece, an 8% discount to the stock’s HK$21.80 closing price in Hong Kong.
It experienced a downsized share-sale of 2.75% at HK$21.20 in the first session since the deal was finalized. The size of the deal was amplified by 25% during the institutional bookbuild overnight on high demand from investors. This is the largest ever healthcare follow-on in Hong Kong.
The transaction could trigger more capital raisings in Hong Kong as companies take advantage of positive sentiment towards healthcare stocks amid the coronavirus pandemic.
“Follow-on deals can be done very quickly, it comes down to sentiment and price,” said a capital markets lawyer, who could not be named because he was not authorized to speak to media.
“Companies in healthcare and biotech are doing very well, I think we will see more deals like this happening in Hong Kong.”
The deal was the largest Hong Kong follow-on share sale since CSPC Pharmaceutical Group’s $1.26 billion transactions in 2015, Refinitiv data showed.