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Tencent unit China Literature launches up to $1.1 billion HK IPO

Published 10/22/2017, 10:41 PM
Updated 10/22/2017, 10:50 PM
© Reuters.  Tencent unit China Literature launches up to $1.1 billion HK IPO

By Elzio Barreto

HONG KONG (Reuters) - China Literature Ltd, China's largest online publishing and e-book company, launched an initial public offering for up to $1.1 billion on Monday, seeking funds for acquisitions and to expand its digital publishing business.

Tencent Holdings Ltd controls China Literature with a 62 percent stake. Private equity firm Carlyle Group (NASDAQ:CG) LP owns 12.2 percent while Trustbridge Partners, a private equity firm founded by Shujun Li, the former CFO of Shanda Interactive, holds 6 percent.

According to a term sheet for the IPO seen by Reuters, China Literature and some of its shareholders are offering 151.37 million shares in an indicative range of HK$48 to HK$55 each.

The new shares will be equivalent to 16.7 percent of China Literature's enlarged share capital, with its market capitalization expected to be up to $6.4 billion.

Tencent and China Literature did not immediately reply to a Reuters request for comment on the IPO terms.

The China Literature IPO is the latest in a series of high-profile technology listings in Hong Kong.

Last month, ZhongAn Online Property & Casualty Insurance Co's hit the market with a $1.5 billion IPO.

And in coming days, Razer Inc, a gaming hardware maker backed by Intel Corp (NASDAQ:INTC) and Hong Kong billionaire Li Ka-shing, is set to launch an IPO for up to $600 million.

China Literature has a business akin to Amazon.com (NASDAQ:AMZN) Inc's Kindle Store, operating a platform with 9.6 million literary works from 6.4 million authors.

Bank of America Merrill Lynch (NYSE:BAC), Credit Suisse (SIX:CSGN) and Morgan Stanley (NYSE:MS) were hired as sponsors for the IPO, with China International Capital Corp Ltd (CICC) and JPMorgan (NYSE:JPM) also working as joint global coordinators.

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