Ant Group IPO News: Secretive Process Viewed as Unusual by Bankers

  • Ant Group is asking its lead bankers to personally sign confidentiality pacts and pushing some investors to explain why they should be allowed to attend marketing meetings ahead of its potentially record breaking initial public offering, reported Reuters, citing sources.
An Alipay office from Ant Group in Shanghai, China.
Source: Andy Feng / Shutterstock.com
  • Ant is following a highly unusual process that uses some of the tactics its former parent and affiliate Alibaba (NYSE:BABA) previously used. The Chinese e-commerce giant, holds a 33% stake in Ant Group.
  • Other unusual measures taken by Ant include dividing up the underwriting work for the deal among several banks, meaning no one firm has the full picture of the process. The main underwriters have also reportedly been discouraged from working on assignments for competitors.
  • Ant’s unusual process is reportedly frustrating some bankers and investors, for example, some banks on the deal did not know that the IPO’s Hong Kong leg would not have any cornerstone investors, according to Reuters.
  • InvestorPlace contributor Tom Yeung wrote on Oct. 5 that the Ant Group IPO poses some issues for American-based investors who can’t access Chinese markets. Instead, he recommended buying BABA stock, which “provides a back-door entrance for U.S. investors to get in on the Ant Group IPO without moving money to Hong Kong or Shanghai.”

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