Xiaomi to draw Qualcomm, China Mobile to $6.1bn IPO in Hong Kong

Bloomberg

Xiaomi Corp. has set tentative terms for the world’s biggest initial public offering in nearly two years, aiming to raise as much as $6.1 billion in Hong Kong, people with knowledge of the matter said.
The Chinese smartphone maker and some existing investors plan to offer 2.18 billion shares at HK$17 to HK$22 apiece, according to the people, who asked not to be identified because the information is private. China Mobile Ltd., the nation’s biggest wireless carrier, and US wireless-chip giant Qualcomm Inc. are among companies in talks to buy stock as cornerstone investors in the deal, the people said.
Beijing-based Xiaomi aims to start taking orders from institutional investors as soon as Thursday, the people said.
Xiaomi, led by serial entrepreneur Lei Jun, was the first to file for a Hong Kong IPO with a weighted-voting rights structure after the city’s bourse changed its listing rules in April. The deal could become the world’s biggest first-time share sale since September 2016, when Postal Savings Bank of China Co. raised $7.6 billion in a Hong Kong share sale, data compiled by Bloomberg show.
China Mobile and Qualcomm have been discussing potential investments of around $100 million each in the Xiaomi IPO, according to the people. An affiliate of Chinese express delivery firm SF Holding Co. is in talks to buy about $30 million of stock, the people said.
CMB International’s private equity arm has been discussing a potential HK$1.5 billion ($191 million) investment, while an investment fund run by China Development Bank is in talks to buy HK$518 million of shares in the Xiaomi offering, the people said. An investment fund backed by China Merchants Group is in talks to purchase about HK$220 million of stock, according to the people.
The company was expected to finalise the list of cornerstone investors on Wednesday, the people said.
Details of Xiaomi’s offering, including the amount of stock to be bought by each cornerstone investor, could still change before the deal launches, the people said. Representatives for Xiaomi, China Mobile and Qualcomm declined to comment, while a person who answered the phone at SF Holding’s office in Shenzhen declined to transfer calls. Representatives for the other cornerstone buyers said they couldn’t immediately comment or couldn’t be reached.
CLSA Ltd., Goldman Sachs Group Inc. and Morgan Stanley are leading Xiaomi’s Hong Kong IPO as joint sponsors, according to an exchange filing last month. Credit Suisse Group AG, Deutsche Bank AG, JPMorgan Chase & Co. and six Chinese banks are also helping arrange the share sale, the people have said.