(Corrects size of Liu's one-time share award in 8th paragraph)
* JD.com IPO is the biggest US listing by a Chinese company
* Starts trading on Thursday
* Selling shareholders to pocket $468 million
By Amrutha Gayathri and Denny Thomas
May 21 Chinese e-commerce firm JD.com Inc's
has priced it U.S. IPO above the marketing range to raise
$1.78 billion, pointing to strong demand for bigger rival
Alibaba Group Holding Inc upcoming mega float.
Loss-making JD.com, backed by Saudi billionaire Prince
Alwaleed bin Talal's Kingdom Holding Co, is set to
debut on Nasdaq on Thursday in what would be the biggest listing
of a Chinese company in the United States.
China's No. 2 e-commerce company priced its American
Depositary Shares (ADS) at $19.00 each, above the $16 to $18 per
ADS indicated range, valuing the company at more than $25
billion, according to its underwriters.
Investors are watching JD.com, hoping for clues as to how
Wall Street will receive its much larger peer. Alibaba has filed
for what some expect could be the largest initial public
offering by a technology company to date.
JD.com, which has forged a close partnership with Alibaba
arch-rival Tencent Holdings Ltd, will raise $1.31
billion from the sale of 69 million ADS.
It would raise another $1.31 billion by issuing shares to
Tencent, JD.com said in a statement. JD.com and Tencent agreed
to merge their e-commerce operations in March and as part of
that deal, Tencent agreed to subscribe to JD.com shares.
The 10-year-old company, the biggest direct seller of online
goods in China, will remain tightly controlled by founder and
CEO Richard Liu after the IPO, through special shares that grant
him extra voting rights.
JD.com awarded billionaire Liu a one-off bonus as the
company prepared for its IPO, booking share-based expenses of
$591 million, according to a securities filing. The award was
worth $891 million at the IPO price..
CHINESE TECH STOCKS
Investor appetite for Chinese technology stocks recovered in
2013 after a series of accounting scandals dried up U.S.
listings in 2011 from a high of 40 in 2010.
This year, investors have driven down valuations of tech
stocks, including that of Amazon.com, but many on Wall
Street expect a stellar debut from Alibaba, which controls some
80 percent of all online Chinese commerce.
China's business to consumer e-commerce sales may pass $180
billion this year due to rising Internet usage, expanding
middle-class incomes and a better distribution network,
according to New York-based market research firm eMarketer.
JD.com had an 18.3 percent share of that market as of the
third quarter of 2013, according to Beijing-based iResearch. It
claims some 30 million-plus active customers and saw net revenue
jump 70 percent to $8 billion in 2013's first nine months.
The selling shareholders including CEO Liu, Tiger Global
Management, Hillhouse Capital Management, DST Global funds,
Capital Today would pocket $468 million.
Formerly known as 360Buy, JD.com has already raised more
than $2 billion in previous years from investors including the
Ontario Teachers' Pension Plan and Kingdom Holding.
Bank of America and UBS AG were the lead
underwriters for the IPO.
(Writing by Edwin Chan; Editing by Sriraj Kalluvila, Ken Wills
and Stephen Coates)