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HKBN IPO priced at top of range as CVC, GIC, Carlyle raise $710 mln-Reuters

(Reuters) – Private equity firm CVC Capital Partners, a unit of Carlyle Group LP and Singapore’s sovereign wealth fund GIC raised a combined $710 million after Hong Kong’s second-largest broadband Internet provider, HKBN Ltd, priced its IPO at the top of expectations, people familiar with the deal said on Thursday.

The IPO was priced at HK$9 per share, at the top of the HK$8 to HK$9 marketing range, said the people, who couldn’t be named because details of the sale of 645 million shares weren’t yet public.

Two other investors raised about $40 million in the listing, from which HKBN – previously known as Hong Kong Broadband Network – itself received no funds. No new shares were offered in the sale, worth $750 million in total.

HKBN didn’t immediately reply to a Reuters request for comment on the IPO pricing. CVC, Carlyle and GIC didn’t respond to requests for comment on the deal.

CVC bought HKBN from Hong Kong Television Network Ltd in May 2012 for about $628 million. HKBN offers high-speed Internet to homes and businesses and competes with HKT Trust and I-Cable Communications Ltd., among others.

The private equity firm three months later sold a $40 million stake to Singapore’s GIC and a $29 million stake to Carlyle’s AlpInvest.

CVC raised $626 million from the IPO after slashing its HKBN stake to about 14 percent from 68 percent previously, while AlpInvest raised $72 million and GIC $11.5 million, based on the number of shares offered in the deal.

A group of HKBN employees sold shares for $32 million, while HKBN Chief Executive Officer William Yeung is getting $7.4 million from the sale of part of his stake in the company.

Goldman Sachs, JPMorgan and UBS were hired as joint sponsors and joint global coordinators for the IPO, with CLSA and HSBC also acting as joint bookrunners.

The banks stand to jointly earn up to $18.8 million in commissions from the deal, equivalent to a 1 percent underwriting fee, a 1 percent incentive fee and 0.5 percent discretionary fee, according to the IPO prospectus.