AGBANK, largest public offerings ever
Agricultural Bank of China (AGBANK), China's third largest bank, has priced its initial public offering dual Hong Kong and Shanghai, which should enable it to raise more than $ 22 billion (17.5 billion euros ) hypothesized high, bigger bet on the market ever.
The first trading day will be held July 15 in Shanghai and Hong Kong the next day. The official announcement of the award is scheduled for Wednesday.
AGBANK, founded by Mao Zedong in 1951, operates a large network of branches in the Chinese countryside and in larger cities.
Three years ago, AGBANK was technically bankrupt.His recovery, after a rescue of 30 billion dollars, has been boosted by the strong growth experienced in the country and the state control over the banking sector.
In Hong Kong, AGBANK sold 25.4 billion shares, representing 8% of its enlarged capital, at a price of 3.20 Hong Kong dollars part, totaling 10.4 billion U.S. dollars, it was reported Tuesday source close to the matter.
The bank had tightened Monday its price range, between 3.18 and 3.38 dollars per share in Hong Kong, against an initial range of 2.88 to 3.48 dollars.
In Shanghai, the price was fixed at the top of its indicative range which started at 2.52 yuan.AGBANK will sell 22.24 billion of yuan-denominated A shares at a price of 2.68 yuan coin, or 59.6 billion yuan (8.8 billion dollars).
In total, AGBANK rise $ 19.3 billion through its dual listing and even 22.2 billion dollars if the over-allotment option is exercised, an event likely in view of the application.
Previously, the largest ever IPO was that of Industrial & Commercial Bank of China with 21.9 billion in 2006.
OFFER 20 times oversubscribed
China International Capital Corp (CICC), Deutsche Bank, Goldman Sachs, JPMorgan, Macquarie and Morgan Stanley are the banks organizing the operation in Hong Kong, with the brokerage firm of AGBANK.
For placing on the market in Shanghai, banks are CICC, CITIC Securities, Guotai Junan Securities and Galaxy.
AGBANK is quoting on the stock market to allow the government to achieve its objective, namely to have the four largest banks in the country publicly traded.
Having for many of them had periods of insolvency, it are now among the largest banks – and companies – in terms of market capitalization.
A source familiar with the matter, it indicates that the offer of AGBANK in Shanghai was 20 times oversubscribed by institutional investors.
In Hong Kong, the institutional demand came from Asia to 4%, 30% U.S. 25% Europe thee, according to sources involved.
Individuals have however shown little enthusiasm in Shanghai, like Hong Kong.
The IPO allotment option included, values AGBANK about 150 billion dollars (nearly 120 billion euros), making it the fourth largest bank in terms of global market capitalization behind ICBC, China Construction Bank and HSBC .
Chaired by Xiang Junbo, headline writer and war hero, AGBANK operates 24,000 branches, employs 441,000 people and boasts 320 million customers.
The price for AGBANK bodes well for the four Chinese banks wishing to raise capital as is the case for Bank of China and ICBC.
The Shanghai stock market has lost nearly 25% since mid-April and fell sharply last week, partly because investors sold shares to participate in the offer AGBANK.