Alibaba eyes November window for $10 bn IPO

Alibaba Group Holding Ltd is deciding between launching a sharply reduced $10 billion Hong Kong share sale in November or delaying the deal till next year as global uncertainty mounts, people familiar with the matter say.

China’s largest company is weighing its options for the city’s biggest first-time sale of stock since 2010, but the window for pulling off its mega deal in 2019 is closing fast. It can proceed with a required initial public offering (IPO) hearing—either after its 1 November earnings or 11 November Singles’ Day shopping gala—or risk postponing a deal altogether till 2020, people familiar with the matter say.

Alibaba is reluctant to drag things out as uncertainty mounts around US-Chinese tensions and the global macroeconomic outlook, they added, asking not to be identified talking about a sensitive matter.

Alibaba’s listing was to be the crowning achievement of a Hong Kong stock exchange that lost many of China’s brightest technology stars to US rivals. Instead, pro-democracy and anti-China protests erupted over the summer, rattling the financial hub and hammering mainland-related stocks. Billionaire Alibaba co-founder Jack Ma’s dream of listing closer to home—a move that would have curried favour with Beijing and hedged against trade war risks—risks back-firing without an offering.

The company is now considering the week after its quarterly earnings release or the country’s largest online retail bonanza as the most likely openings, the people said. Alibaba’s looking to raising closer to $10 billion, about half of an original target, the people said. The company can capitalize on the strong recent reception for Hong Kong IPOs, with several companies including Anheuser-Busch InBev NV’s Asian unit raising $1 billion or more. Alibaba declined to comment in an email.

It “is closer to home, and people are more familiar with its business here, so it could get a good valuation if it listed in Hong Kong,” said Julia Pan, a Shanghai-based analyst with UOB Kay Hian.

Any decision however will hinge on investors’ reaction to its results, which are expected to underscore the e-commerce juggernaut’s slowest pace of revenue growth in about three years.bloomberg

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