New Oriental Education and Technology Group, one of China’s largest and oldest providers of educational services, will raise up to $1.53 billion through a second listing in Hong Kong, the company said, seizing on positive investor sentiment towards such firms during the global pandemic, reported Caixin.
The deal will make New Oriental the latest in a string of major New York-listed Chinese companies to make secondary listings in Hong Kong, as they try to make their shares more accessible to investors in their home market, said Caixin.
New Oriental will offer 8.51 million shares at a maximum price of HK$1,399 ($180.52) per share, it said in an announcement on Wednesday. The company’s stock last closed at $165.90 in New York. Underwriters for such secondary listings typically try to price shares as close as possible to their New York trading level to avoid potential for arbitrage when the stock begins trading in Hong Kong, said Caixin.
If demand is strong, the company could sell another 1.28 million shares as part of its over allotment option, potentially bringing total fundraising to as much as $1.76 billion. The big majority of the offering, some 94%, would go to international investors, with the rest reserved for local buyers in Hong Kong.