Home Wealth  Money Sun Art Raises $1 Billion In Hong Kong IPO

Sun Art Raises $1 Billion In Hong Kong IPO

Posted: Jul. 11th, 2011  |  By Forbes

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Sun Art Retail Group raised 8.2 billion Hong Kong dollars ($1.05 billion) by selling over 1.14 billion shares in a Hong Kong initial public offering.

Priced at 7.20 Hong Kong dollars ($0.93) per share, the top end of the indicative range, Sun Art's IPO attracted strong demand from both institutional and retail investors.

The retail tranche, originally accounting for 10% of the total offering, was 42 times oversubscribed and triggered a claw-back that increased the portion to 20%.

Meanwhile, the institutional tranche fell to 80% with 15 times oversubscribed. More than 500 investors were attracted, according to a source familiar with the matter, including nine guaranteed cornerstone investors contributing a total of $420 million worth of shares.

The Shanghai-based retailer is the largest hypermarket operator in China with a 12% market share, followed by Wal-Mart's (nyse: WMT - news - people ) 11.2%.

A joint venture between French retail operator Groupe Auchan SA and Taiwanese Ruentex Group, Sun Art currently operates 197 hypermarkets across 21 provinces in mainland China under two brand names, Auchan and RT-Mart.

Ruentex Group is a Taiwanese conglomerate that covers retailing, construction as well as education. Ruentex is chaired by Taiwanese billionaire Samuel Yin Yen-Liang, ranked by Forbes as the 24th richest person in Taiwan with an estimated net worth of $1.43 billion.

Sun Art was the second company this year in Hong Kong to raise more than $1 billion after MGM China in May, according to data from Bloomberg.

The pricing gave Sun Art a market capitalization of 67.5 billion Hong Kong dollars ($8.67 billion). The group said in their prospectus that 50% of the money raised will be used to fund new hypermarkets in China.




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