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Greenshoe option to boost Alibaba IPO size to record $25 billion [Times of Oman](Times of Oman Via Acquire Media NewsEdge) New York: Alibaba's initial public offering (IPO) became the biggest ever at $25 billion, after bankers exercised an option to boost the deal size by 15 per cent on strong demand, a person familiar with the matter said. The underwriters exercised a so-called greenshoe option to sell an additional 48 million American depositary shares, said the person, who asked not to be identified as the information is private. Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan Chase, Morgan Stanley and Citigroup managed the offering.To view the picture gallery, click here Shares of Alibaba soared 38 per cent on their Friday trading debut, the biggest first-day jump for an IPO of at least $10 billion, data shows. Its dominance of a booming e-commerce industry in the country of 1.36 billion people attracted interest from money managers including Fidelity Investments, BlackRock and T. Rowe Price, who each asked for at least $1 billion of shares. "Expectations for this company are sky high," Li Muzhi, a Hong Kong-based analyst at Arete Research Service LLP, said on Monday by phone. "The market seems to be using Alibaba as a proxy for the macroeconomy and consumer economy."Package shipments The number of Chinese Internet users has grown to 632 million, greater than the population of any other country except India, and could exceed 850 million by 2015, government data show. Alibaba, led by chairman Jack Ma, surpassed Facebook by market capitalisation from the minute it started trading and closed with a valuation of $231.4 billion, making it larger than Amazon.com and EBay combined. Florence Shih, a Hong Kong-based spokeswoman for Alibaba, didn't immediately return a call seeking comment. The 'Wall Street Journal' reported earlier on Monday the company had exercised the greenshoe option, citing unidentified people. McKinsey predicts online commerce in the world's second-largest economy will reach $395 billion next year, triple its 2011 level. Alibaba's retail platforms helped generate 6.1 billion package shipments in the 12 months ended June, accounting for 54 per cent of the nation's total, the company said in August. The Chinese e-commerce company's sale, already the biggest in the United States, surpassed Agricultural Bank of China's $22.1 billion IPO in 2010 as the world's largest after the greenshoe was exercised, according to data.Film production Operating profit at Alibaba advanced to $1.1 billion in the three months ended June, or 42 per cent more than the combined profit of Amazon and EBay for the period. Revenue rose 46 per cent in local currency to the equivalent of $2.54 billion. Since the start of 2012, Alibaba has announced $16.1 billion of acquisitions as it expands into industries including film production, taxi-booking services and professional soccer, data show. In May, Alibaba bought a 10 per cent stake in Singapore Post to develop its logistics in Southeast Asia. It also invested in Youku Tudou, operator of China's biggest online video sites, and on July 15 announced plans for a streaming service with Lions Gate Entertainment.Investor crowds Before the greenshoe option was exercised, Alibaba was already the largest United States IPO, ahead of Visa's $19.7 billion first-time share sale in 2008, data show. It was able to break the record with the support of large investors, as nearly half the shares were placed with just 25 funds, people with knowledge of the matter said last week. Alibaba drew crowds of money managers to meetings held around the world as the company pitched itself this month to prospective shareholders. As many as 800 people turned up to the first event at New York's Waldorf Astoria hotel. Ma, who started Alibaba from his Hangzhou apartment in 1999 with $60,000, watched his net worth swell to $26.5 billion as the shares rose, according to the Bloomberg Billionaires Index. The 50-year-old former schoolteacher is China's richest man, trailing only Hong Kong property tycoon Li Ka-shing among Asian billionaires. Simpson Thacher & Bartlett and Sullivan & Cromwell provided legal advice. Rothschild was Alibaba's IPO adviser, (c) 2014 Muscat Press and Publishing House SAOC Provided by SyndiGate Media Inc. (Syndigate.info). |