WASHINGTON - The Federal Reserve's monetary stimulus is helping the U.S. economy recover but the central bank needs to see further signs of traction before taking its foot off the gas, Fed Chairman Ben Bernanke said on Wednesday.
LONDON - From ketchup to hot drinks, family-run investment firms are shaking up the consumer deals market, squeezing out private equity players and forcing them to change strategy.
BEIJING/HONG KONG - China reiterated its opposition on Thursday to a European Union plan to limit airline carbon dioxide emissions and called for talks to resolve the issue a day after its major airlines refused to pay any carbon costs under the new law.
AgBank seeks 1-year, $1 billion lock-ups from Qatar, Temasek
HONG KONG |
HONG KONG (Reuters) - The Agricultural Bank of China ABC.UL is close to signing up a list of cornerstone investors, including Temasek TEM.UL and Qatar's sovereign fund, for its roughly $20 billion Hong Kong and Shanghai IPO, sources involved with the deal said on Thursday, with the bank hoping to get a one year lock-up commitment.
Cornerstone investors for AgBank's Hong Kong-listed H-share offering are expected to invest between $100 million and $1 billion each, the sources said. Interested sovereign funds, which also include Kuwait and China Investment Corp, are in talks to buy up shares worth closer to the $1 billion mark.
So-called cornerstone investors are important to the success of an IPO and in this case could prove critical to the offering, as the deal is racing against a falling stock market.
These investors agree to buy into the IPO before the pre-marketing period, allowing the underwriters to show potential institutional investors that the deal already has solid financial backing. In return, cornerstones receive preferential shares.
AgBank's underwriters are in talks to sign up around 20 cornerstone investors, the sources said, with the final list expected to be wrapped up this weekend.
HONG KONG APPROVAL
The Hong Kong stock exchange listing committee gave its approval to the IPO on Thursday, as expected, a day after China's regulators gave the deal their green light, one source said.
The sources said the IPO was expected to price on July 7, with a debut the following Thursday or Friday.
If AgBank raises more than the $23 billion it hopes for, it will be the world's largest ever IPO.
Multinational corporations are also in discussions to sign up for the deal [ID:nTOE65805Q]. Chinese regulations forbid foreign institutions from investing in AgBank's Shanghai-listed A-share offering.
Normally, cornerstone investors are locked up for six months, but with AgBank pushing such a massive IPO, a one-year commitment will add confidence to the offering in the aftermarket.
Large IPOs often push for 12-month lock-up periods, as occurred with several of China's big bank offerings.
The bank's top executives and Beijing officials are asking the underwriters to ensure that the stock trades up around 10 percent on its debut, the sources said.
Like any deal that is not yet closed, plans and agreements can change at the last minute.
A Reuters poll of 18 fund managers, strategists and analysts conducted this week suggests AgBank could command a valuation of 1.5 times its book value, meaning the lender's IPO is likely to end up raising closer to $20 billion than the $30 billion originally envisioned.
AgBank unveiled key financial figures last Friday, detailing plans to issue up to 47.6 billion new shares, or 15 percent of its expanded capital, and forecasting a sharp rise in yearly net profit.
Shanghai A shares would account for 7 percent of the lender's enlarged capital, while its Hong Kong H shares would account for 8 percent, according to the preliminary prospectus.
(Editing by Jacqueline Wong and Edmund Klamann)
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