HONG KONG (Reuters) - Chinese online gaming firm NetEase (NTES.O) raised at least $2.7 billion in a Hong Kong secondary offering, two sources said on Friday, amid doubts that mainland firms can list in New York as Sino-U.S. tensions deepen.
NetEase’s deal, the second after Alibaba (BABA.N) in 2019, is expected to be one of several large secondary deals in Hong Kong this year.
Its shares were priced at HK$123 ($15.87) each, the sources with direct knowledge of the matter told Reuters.
The company had planned to sell 171.48 million shares, according to an earlier term sheet, and has the option of selling another 25.72 million shares, under a so-called ‘greenshoe’ option.
The Hong Kong price is equivalent to $396.70 for NetEase’s U.S.-listed shares which is a 2% discount to the stock’s last closing price of $405.01 on Thursday.
Under the terms of the deal, one American depository receipt (ADR) is worth 25 of the company’s Hong Kong shares.
In its earlier regulatory filings, NetEase said it planned to use the money raised in its Hong Kong listing to fund its international expansion plans.
Charles Li, CEO of Hong Kong Exchanges and Clearing Ltd (0388.HK), said on Thursday he expected 2020 to be “a big year” for what he called “returnees” from U.S. markets.
The U.S. administration has questioned whether Chinese companies should be able to list in New York as tensions with Beijing rise.
“Today the atmosphere in the U.S. is becoming less friendly and we obviously have fundamentally changed many aspects of our listing regime so that we are becoming more accommodating,” he said via webcast at an industry conference held by Piper Sandler.
Chinese e-commerce company JD.com is due to launch its Hong Kong listing as early as Friday, according to sources with knowledge of the matter, to sell up to 5% of its stock to raise at least $3 billion.
Shares of Netease debut on June 11.
NetEase did not immediately respond to a request for comment.
($1 = 7.7501 Hong Kong dollars)
Additional reporting Pei Li; Editing by Muralikumar Anantharaman and Jacqueline Wong