Economy
Minsheng down in HK IPO as banks long for cash
(Agencies)
Updated: 2009-11-26 13:56
IPO Price
Minsheng priced its shares at 1.7 times forecast book value for 2010. By comparison, Bank of Communications, China's No. 5 lender, traded at about 2.17 times 2010 book value, while China Merchants Bank and CITIC Bank traded at 2.75 times and 1.66 times book value, respectively, according to a UBS research report.
The Hong Kong retail tranche was about 159 times subscribed. The popularity triggered the clawback option, raising the retail portion to 20 percent from 5 percent of total offering.
Billionaire investor George Soros, Tiger Fund, Temasek and China Life Insurance Co committed to buying Minsheng's shares from the institutional portion of its IPO, sources said earlier.
However, Hopu Investment Management, a highly influential China-focused private equity fund, decided to pull out of plans to invest up to $1 billion in Minsheng at the eleventh hour due to concerns the price was too high, sources told Reuters.
Minsheng Bank operates 29 branches and 387 sub-branches domestically, with total assets at the end of September of 1,403 billion yuan ($205 billion).
The mid-sized lender forecasts 2009 net earnings will jump at least 39 percent to 11 billion yuan ($1.61 billion).
