Jack Ma's Ant Group raises IPO valuation target to US$280b

Beijing

ANT Group plans to increase the valuation target for its initial public offering to at least US$280 billion due to strong demand, charging ahead with the sale even as the Trump administration weighs restrictions on the Chinese fintech giant, according to people familiar with the matter.

The Hangzhou-based company is lifting the target by at least 12 per cent from a previous estimate of US$250 billion after initial discussions with investors, the people said, requesting not to be identified because the matter is private. Ant aims to raise about US$35 billion in the sale, the sources added.

Despite the US headwinds, Jack Ma's Ant is moving ahead with what could be the world's largest IPO, with same-day listings in Hong Kong and Shanghai, the people said. At US$280 billion, Ant would be bigger than Bank of America and three times the size of Citigroup, while its sale would top Saudi Aramco's record US$29 billion raise.

The Hong Kong stock exchange has scheduled an Ant hearing for as soon as next week, pending an approval from the Chinese securities watchdog, a requirement for companies conducting dual listings in China and Hong Kong, sources said.

The Hong Kong hearing before a 28-member panel of external professionals has been expected for weeks but has yet to happen. If it's delayed much further, the IPO risks straddling the Nov 3 United States election where some expect a surge in postal ballots to create prolonged uncertainty. The one-week gap in Hong Kong between the pricing of an IPO and the start of trading means investors would be left exposed to an increase in volatility.

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The Trump administration is exploring restrictions on Ant, as well as rival Tencent Holdings, over concerns that their digital payment platforms threaten US national security.

President Donald Trump's ban on Tencent's WeChat in the US is facing push back. A magistrate judge said this week she's unlikely to allow the country to implement prohibitions on WeChat while the government appeals her earlier ruling.

Ant said it's making progress in getting the required approvals for its IPO in Shanghai and Hong Kong, following reports that it has yet to receive a green light from the Chinese securities watchdog.

Ant has added Barclays, ICBC International and BOC International to its list of joint book runners for the Hong Kong sale, people familiar with the matter said. That's in addition to China International Capital Corp, Citigroup, JPMorgan Chase & Co and Morgan Stanley acting as sponsors and Credit Suisse Group acting as joint global coordinator for the Hong Kong leg.

Singapore's sovereign wealth fund GIC is planning to invest more than US$1 billion in Ant's Hong Kong and Shanghai IPO, sources have said. The listing is also drawing interest from other existing investors like Temasek Holdings and the National Council for Social Security Fund, they added. BLOOMBERG