China Mobile to buy back $12.6 bln of its Hong Kong shares

A sign of China Mobile is seen on a street, during the coronavirus disease (COVID-19) outbreak in Shanghai, China January 8, 2021. REUTERS/Aly Song

SHANGHAI, Jan 4 (Reuters) - China Mobile Ltd will buy back up to $12.6 billion worth of its Hong Kong listed shares on the market, as the company prepares for its 48.7 billion yuan ($7.7 billion) listing in Shanghai on Wednesday, China's biggest public share offering in a decade.

The company told the Hong Kong Stock Exchange it would press ahead with a plan to buy back up to 2.05 billion shares using existing cash and working capital.

China Mobile's (0941.HK) Hong Kong shares rose 1.91% on Tuesday to close at HK$48 ($6.16), the highest since early November, before the news was announced.

In the stock exchange announcement, the company said the buyback would represent about 10% of its issued shares in Hong Kong and the purchased shares would be cancelled.

At the current Hong Kong price, the deal would be worth about $12.6 billion, but would rise if the stock gained ground during the buyback period.

The world's largest mobile network operator by subscribers, China Mobile sold 845.7 million shares at 57.58 yuan ($9.06) each in Shanghai, the company said in an exchange filing on Tuesday, announcing the debut date.

At Tuesday's close, the company's Hong Kong-listed shares traded at a 32% discount to the stock's Shanghai offering price.

The size of China Mobile's share sale would be expanded to 56 billion yuan if an over-allotment option is fully exercised, making the public offering China's fifth-biggest on record, according to Refinitiv data.

China Mobile's smaller state-owned rivals, China Telecom and China Unicom (0762.HK), are already listed in mainland China.

The three were delisted from the New York stock exchange after a Trump-era decision to restrict investment in Chinese technology firms, amid continuing tensions between Washington and Beijing. read more

($1 = 6.3521 yuan)

($1 = 7.7981 Hong Kong dollars)

Reporting by Samuel Shen and Scott Murdoch Editing by Stephen Coates and Mark Potter

Our Standards: The Thomson Reuters Trust Principles.

Thomson Reuters

Scott Murdoch has been a journalist for more than two decades working for Thomson Reuters and News Corp in Australia. He has specialised in financial journalism for most of his career and covers equity and debt capital markets across Asia based in Hong Kong.