By Prudence Ho
HONG KONG--Broadband-services provider HKBN Ltd. raised US$750
million after pricing its Hong Kong initial public offering at the
top end of the price range, people familiar with the situation said
Thursday, making it the second-largest IPO in Asia Pacific this
year.
Private-equity firm CVC Capital Partners and other shareholders,
including Singapore sovereign-wealth fund GIC Pte Ltd., sold 645
million shares at 9 Hong Kong dollars (US$1.16) each, at the top
end of an indicative price range of HK$8-HK$9, the people said.
CVC will hold about a 14.4% stake in HKBN after listing,
compared with 70.7% currently, if no overallotment option is
exercised, while GIC will hold a 9.9% stake, down from 11.3%. The
firm is scheduled to list on the Hong Kong Stock Exchange on March
12.
Before the start of taking orders from institutional investors
on Feb. 24, more than a quarter of the offering had been presold to
the cornerstone investor, Canada Pension Plan Investment Board,
which agreed to buy and hold the shares for six months. The
Canadian pension fund has bought around US$200 million in HKBN.
The offering is the largest in Hong Kong this year and the
second biggest in Asia Pacific, after the US$1.7 billion February
listing by Jasmine Broadband Internet Growth Infrastructure Fund in
Bangkok.
Hong Kong, usually a powerhouse for big China listings, has had
a slow start this year, with just US$291 million raised in IPOs,
according to Dealogic, compared with US$4.1 billion in the same
period last year.
The pricing at the top end of the indicative range reflects a
positive response from the market as investors are hungry for yield
plays. HKBN plans to pay out a dividend of not less than 90% of its
free cash flow to shareholders, according to its preliminary
prospectus. The price range represents a forecast 2015 dividend
yield of about 4.8%.
HKBN and Richard Li's HKT Trust jointly control most of the
residential broadband market in Hong Kong, which has a population
of more than seven million. Units of HKT Trust, which pays about a
4.3% dividend yield, have risen about 29% in the past 12
months.
HKBN and HKT Trust respectively controlled 33% and 48% the
city's residential broadband subscriber market in 2013, according
to a Goldman Sachs research report.
Goldman Sachs Group, J.P. Morgan Chase & Co. and UBS AG are
the lead banks for the transaction.
Write to Prudence Ho at prudence.ho@wsj.com
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