US-traded shares of Alibaba Group have increased this past week following newswire Reuters’ report of a planned initial public offering (IPO) for its Ant Financial Services Group payments affiliate.
On Tuesday, Reuters reported that Alibaba was seeking a Hong Kong IPO for Ant that would value the fintech at more than $200bn, although Ant said information about its IPO plans was incorrect. Last year, Alibaba converted its profit share agreement in Ant Financial into a 33% stake in the financial services firm.
The listing may reportedly happen as soon as this year and could involve the sale of between 5% and 10% of Ant’s shares.
The IPO would one of the largest-ever and at that valuation greater than Alibaba’s $167.6bn at its flotation in September 2014.
It would also push Ant’s value above Tiktok owner ByteDance’s, which is reportedly about $110bn but could fetch up to $180bn in an IPO, albeit this might be affected by the US and India’s crackdown.
At this scale and size there are few exchanges able to provide the liquidity and investor reach but these deals also incur geopolitical considerations.
Alibaba’s own IPO on the New York Stock Exchange capped a comeback for China-based businesses pursuing cross-border listings, just three years after NYSE delisted more than 100 Chinese companies for fraud and accounting malpractice.
Now, Alibaba and Ant reportedly might choose Hong Kong in the week of concerns about China’s crackdown on the territory.
Ant’s listing would be a vote of confidence if it happens but if nothing else offers a welcome few headlines.
