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China's Baidu to raise $3.1 billion from Hong Kong listing: Sources

China's Baidu to raise $3.1 billion from Hong Kong listing: Sources
The Chinese search engine giant Baidu is reportedly planning to get itself listed and has set a target of raising $3.08 billion from the stock market and has set a price of HK$252 ($32.45) for each share. The company plans to list itself for public trading in Hong Kong through a secondary listing, said reports quoting information from sources with direct knowledge of the matter.
The reports said that as a part of this latest planned transaction, about 95 million shares will be sold by the New York-listed Baidu.
While the sources in reports were not named, there were also no comments in the reports from Baidu on the pricing of the deal.
In its earlier listing documents, Baidu had made it clear that its shares would be priced at no more than HK$295 ($38.02) each for retail investors and would represent about 3.4 per cent of the total shares.
The price of HK$252 is 2.7 per cent lower compared to Baidu's closing price of $266.78 in New York on Tuesday when its American Depository Shares rose 0.47 per cent. So far this year, the share price of Baidu at the New York exchange up by 23.37 per cent.
The listing documents showed that one Baidu American Depository Shares is equivalent to eight of its Hong Kong shares. The shares will start trading on the Hong Kong market on March 23.
Baidu is the latest Chinese etch company that is currently listed in the United States but has made a listing in China in what is being described as the so-called homecoming listing. This trend was started by the Chinese e-commerce giant Alibaba Group in November 2019.
There were 12 secondary listings in Hong Kong in 2020 that raised $19.06 billion.
According to dealmakers, the number of companies planning to launch a secondary listing in Chinese exchanges is quote strong for 2021 with the US listed Chinese companies wait for guidance on whether new US President Joe Biden would stick to the plans of delisting Chinese companies from the US stock exchanges if they did not meet certain conditions – a measure that was announced to be implemented by the former US president Donald Trump.
The money that Baidu plans to raise from the secondary listing was lower than the $5 billion target that was set by the company prior to the market sell-off of tech stocks which resulted in the company losing about one fifth of its market value.
Baidu had got itself listed on the Nasdaq in 2005 but now is [planning a sell off to raise funds from exchanges closer to its home market of China to create a hedge against a forced delisting in the US.
"Preliminary discussions with potential investors have been very positive," said reports about the secondary listing quoting people familiar with the transaction said. "Despite the recent volatility, we believe investors will look at the long-term value of Baidu."
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Christopher J. Mitchell

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