November 12, 2009 / 2:51 AM / 8 years ago

Soros, CIC help Longfor raise $912 million in IPO

HONG KONG (Reuters) - Chinese property developer Longfor Properties Co raised $912 million, pricing its Hong Kong initial public offering at the top end of an indicated range on Thursday, according to two sources close to the deal.

Billionaire investor George Soros bought HK$200 million (US$25.8 million) worth of shares, while $293 billion sovereign fund China Investmnent Corp (CIC) also invested through the international tranche, another source said.

The company sold 1 billion shares, or 20 percent of its enlarged share capital, at HK$7.07 each, compared with an indicative range of HK$6.06 to HK$7.10, according to the sources.

The pricing near the top end of the range indicates that there is still demand for Chinese property IPOs despite a glut of offerings in the last few months.

Longfor’s offering price range represented a multiple of about 12 to 14 times forecast 2010 earnings. By comparison, peer R&F (2777.HK) trades at 11 times 2010 forecast earnings ,while Greentown China (3900.HK) trades at 9.9 times forecast 2010 earnings.

The deal has attracted about US$10 billion worth of orders, or about 12 times the number of shares earmarked for institutional investors, in which more than half are long-term funds and hedge funds, another source close to the deal said.

The company also generated orders for 56 times the shares initially on offer for Hong Kong retail investors. It will trigger the clawback option to increase the retail portion of the global offering to 40 percent from an initial 10 percent.

    The company has signed up five cornerstone investors, including Government of Singapore Investment Corp GIC.UL, Temasek Holdings TEM.UL, Hong Kong Land, China’s Ping An Insurance (2318.HK) and Bank of China Group Investment Ltd, for a combined $197.5 million worth of shares.

    Longfor’s trading debut is scheduled for November 19, under the symbol “960” (0960.HK).

    Citigroup (C.N), Morgan Stanley (MS.N) and UBS UBSN.VX are handling the deal.

    Editing by Chris Lewis

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