Alibaba Health launches $1bn share sale

Alibaba Health launches $1bn share sale

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Alibaba Health Information Technology hit the market on Tuesday evening to raise up to HK$8.2bn ($1.06bn) in fresh equity from a follow-on, according to a term sheet seen by GlobalCapital Asia.

Placing agents Citi and Credit Suisse kicked off an accelerated bookbuild for the deal after trading ended in Hong Kong.

The issuer is selling 400m primary shares, equal to 3.1% of its existing equity capital, at HK$20.05 to HK$20.50 apiece. The range gives the firm proceeds of HK$8.02bn to HK$8.2bn, while investors get a discount anywhere from 6% to 8% to the stock’s last close at HK$21.80 per share.

The follow-on was set to be priced on Tuesday evening. The issuer will have a 90-day lock-up after the trade settles.

Alibaba Health is a subsidiary of Hong Kong-based investment holding company Citic 21CN, which is controlled by Alibaba Group Holding and Yunfeng Capital – a private equity firm founded by Jack Ma and other Chinese entrepreneurs in 2010.

The company plans to use up to 90% of the capital it raises to develop its pharmaceutical and healthcare omni-channel business, as well as its medical and healthcare services business. The balance will be invested in the firm’s digital infrastructure and innovative business, including expanding the range of internet and technological solutions provided for the healthcare industry.

Alibaba Health's Hong Kong-listed shares have climbed 138.8% year-to-date, riding the wave of demand for healthcare sector stocks during the Covid-19 pandemic.

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