- Ant aims to present a preliminary prospectus as soon as the July sources
- Ant needs CSRC guidance on the timing of the source of the prospectus presentation
- Ant says there are no plans to relaunch its IPO
- Warburg Pincus valued Ant at $ 180 billion in late March
HONG KONG, June 9 (Reuters) – China’s central leadership has given the green light to billionaire Jack Ma’s Ant Group to revive its initial public offering (IPO), two sources familiar with the matter said. the clearest sign that Beijing is relaxing. its repression against the technology sector.
Ant, a subsidiary of Chinese e-commerce giant Alibaba Group Holding Ltd (9988.HK), aims to present a preliminary prospectus for the offering of shares in Shanghai and Hong Kong as early as next month. say the sources, who decline to be named. to the sensitivity of the issue.
The fintech giant will have to wait for guidance from the China Securities Regulatory Commission (CSRC) on the specific timing of the prospectus filing, one source said.
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In a statement, Ant said there were no plans to relaunch its IPO without giving further details. He did not respond to Reuters’ request for comment on whether he had received the green light from Beijing.
The company’s listing was hastily filed at the request of Beijing in November 2020. At the time, it was expected to be valued at about $ 315 billion and was expected to raise $ 37 billion, which would have been a world record.
“Under the guidance of regulators, we are focused on constantly moving forward with our rectification work and have no plans to start an IPO,” Ant told his WeChat account on Thursday afternoon.
Neither the CSRC nor the Information Office of the State Council of China, which handles media consultations for central leaders, did not respond to Reuters’ request for comment.
Ant wants to keep plans to revitalize the takeover bid in a low profile pending a formal announcement, after having attracted regulatory glare in its first attempt in 2020 with the waves that supply created as the largest capital float in the world, a separate source with direct knowledge of the issue. dit.
Chinese authorities disconnected the IPO and repressed Ma’s business empire after delivering a speech in Shanghai in October 2020 accusing financial control bodies of stifling innovation.
The derailment of the IPO marked the beginning of a regulatory crackdown to curb China’s huge technology sector, which spread to other industries such as property and private education, eliminating billions. market capitalizations and causing layoffs of some companies.
With the slowdown in its economy in a politically sensitive year in which Xi Jinping is expected to secure an unprecedented third term as party leader, Beijing wants to loosen control of private companies, including technology giants, to help lo to achieve a growth target of 5.5%, which economists. they have said that it will be difficult to achieve given the blockades of COVID-19. Read more
“They are backtracking to counter the blockade they have had. Any data outside of China has been terrible lately because of the blockades and the last thing they want to do is increase this problem. In the next three or six months it is likely let China’s repression develop, “said David Madden, a market analyst at Equiti Capital in London.
A revival of the IPO may also mark a kind of rehabilitation for Ma, who has been keeping a low public profile since Beijing plummeted.
FACILITATE EFFORTS
Chinese Deputy Prime Minister Liu He told technology executives last month that the government supported the development of the sector and will support companies looking to trade in the country and abroad. Read more
In another sign of Beijing’s softer stance, Chinese carrier Didi Global, which has been under cybersecurity investigation since last year, is in advanced talks to buy a third of an electric vehicle manufacturer backed by the state, Reuters reported on Wednesday.
The news of the talks comes after the Wall Street Journal reported on Monday that Chinese regulators are ready to conclude their investigations into Didi, which could offer investors more hope for its recovery. Read more
Bloomberg reported earlier on Thursday that Chinese financial regulators had begun early talks on a possible revival of Ant’s stock market debut, without mentioning a timetable. Read more
The major securities regulator had set up a team to re-evaluate stock sales plans, Bloomberg reported.
The regulator later said in a statement that it had not carried out any evaluation or research work on an Ant IPO.
Alibaba’s U.S.-owned shares, which owns nearly a third of Ant, fell 7% after rising to 7% in pre-market trading, according to the Bloomberg report.
US private equity firm Warburg Pincus, a major investor in Ant’s private fundraising in 2018, reduced its Ant valuation to about $ 180 billion by the end of March from $ 221 billion a year earlier, an independent source said.
Regulators have directed Ant to restructure itself as a financial company rather than a technology company, and sources and analysts have said the financial sector typically has lower valuations.
Warburg Pincus declined to comment Thursday.
“The size of Ant and the IPO will have to be smaller than expected in 2020 because market conditions have changed and cannot be compared to now,” said Dickie Wong, chief executive of Kingston Securities in Hong Kong. Kong.
Shares in the U.S. of Chinese technology and e-commerce companies, including Didi and Alibaba, have gained ground this week in indications that Beijing’s crackdown for a year and a half could be waning.
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Report by Julie Zhu; Additional report by Medha Singh, Abinaya Vijayaraghavan, Scott Murdoch, Kane Wu and Vidya Ranganathan; Editing by Sumeet Chatterjee, Carmel Crimmins, Elaine Hardcastle and David Evans
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