SK Hynix US listing said to be multiple times oversubscribed
The ADR offering is expected to price early Thursday afternoon in New York
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[NEW YORK] SK Hynix’s US$28 billion US listing is multiple times oversubscribed ahead of pricing on Thursday (Jul 9), according to sources familiar with the matter.
The South Korean memory chipmaker’s offering has drawn strong early demand from global long-only funds and technology-focused investors, the sources said, asking not to be identified because the information is private.
About 1,000 institutional investors joined a management marketing call on Monday, the sources said. A representative for SK Hynix did not immediately respond to a request for comment. International Financing Review earlier reported the offering’s subscription level.
SK Hynix began marketing the sale on Monday of 177.9 million American depositary receipts (ADR) valued at about US$28 billion, based on Friday’s closing price of its common shares in Seoul. That would put it on track for the biggest-ever US listing by a foreign company later this week.
Each ADR represents one-tenth of a common share. The offering amounts to 2.5 per cent of SK Hynix’s market value, which has more than tripled this year to more than US$1 trillion, despite sharp swings in chip stocks globally.
The ADR offering is expected to price early Thursday afternoon in New York, before the shares reopen for trading in Korea and ahead of the ADRs’ Nasdaq Global Select Market debut on Friday, the sources said.
Limits on converting the South Korea-listed shares into ADRs may restrict arbitrage, which could cause the ADRs to trade at a premium.
Bank of America, Citigroup, Goldman Sachs and JPMorgan Chase are among the banks working on the deal.
Baillie Gifford, Coatue Management and Situational Awareness Partners have indicated an interest in buying as much as US$7 billion worth of ADRs in the first-time share sale. BLOOMBERG
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