October 24, 2007 / 4:35 AM / 12 years ago

UPDATE 1-China's Alibaba attracts $100 bln in IPO orders

(For a Hong Kong IPO diary, click <HK/IPOMENU>) (Adds details)

HONG KONG, Oct 24 (Reuters) - Chinese e-commerce firm Alibaba.com, raising up to US$1.49 billion in an IPO, has decided to close the order book early for institutional investors in Asia and the United States, after the deal attracted about US$100 billion in share orders from institutions, sources familiar with the deal said.

Order book building for global institutional investors had been scheduled to remain open until Friday but will close on Wednesday in Asia and the United States, one of the sources said. Book-building in Europe, as well as for Hong Kong retail investors, will remain open through Friday, the source said.

The massive orders from institutional investors represent more than 100 times the shares initially on offer to them, excluding shares pledged to eight cornerstone investors.

Because of strong demand, Alibaba.com on Monday had already raised the IPO price range to HK$12.00-HK$13.50 per share, up from the previous HK$10.00-HK$12.00.

Based on the company’s 2007 earnings forecast of 622 million yuan (US$83 million), the new price range is 94.5 to 106.3 times this year’s estimated earnings.

The e-commerce firm, in which Yahoo Inc YHOO.O will buy shares, is offering 858.9 million shares, or 17 percent of its enlarged share capital, in its Hong Kong IPO. Of the offered shares, 85 percent are being sold to institutional investors and 15 percent to Hong Kong retail investors.

Fund managers said the pricing of Alibaba.com was aggressive, but due to its high growth and unique business model, they were keen on investing in the stock.

Final pricing of the deal is set for Oct. 26 or 27, with a trading debut scheduled for Nov. 6 under the symbol “1688” 1688.HK.

Morgan Stanley (MS.N), Goldman Sachs (GS.N) and Deutsche Bank (DBKGn.DE) are sponsoring the deal. (US$1=HK$7.8=7.4938 yuan)

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