China Mobile Ltd will buy back up to $12.6 billion worth of its Hong Kong listed shares on the market, as the company prepares for its 48.7 billion yuan ($7.7 billion) listing in Shanghai on Wednesday, China’s biggest public share offering in a decade.
The company told the Hong Kong Stock Exchange it would press ahead with a plan to buy back up to 2.05 billion shares using existing cash and working capital.
China Mobile’s Hong Kong shares rose 1.91% on Tuesday to close at HK$48 ($6.16), the highest since early November, before the news was announced.
In the stock exchange announcement, the company said the buyback would represent about 10% of its issued shares in Hong Kong and the purchased shares would be cancelled.
At the current Hong Kong price, the deal would be worth about $12.6 billion, but would rise if the stock gained ground during the buyback period.
The world’s largest mobile network operator by subscribers, China Mobile sold 845.7 million shares at 57.58 yuan ($9.06) each in Shanghai, the company said in an exchange filing on Tuesday, announcing the debut date.
At Tuesday’s close, the company’s Hong Kong-listed shares traded at a 32% discount to the stock’s Shanghai offering price.
The size of China Mobile’s share sale would be expanded to 56 billion yuan if an over-allotment option is fully exercised, making the public offering China’s fifth-biggest on record, according to Refinitiv data.
China Mobile’s smaller state-owned rivals, China Telecom and China Unicom, are already listed in mainland China.
The three were delisted from the New York Stock Exchange after a Trump-era decision to restrict investment in Chinese technology firms, amid continuing tensions between Washington and Beijing.
China Mobile said proceeds from the offering would be used to develop projects including premium 5G networks, infrastructure for cloud resources and intelligent ecosystems.
- Reuters with additional editing by Kevin Hamlin, Jim Pollard.
This report was updated with new details on January 4, 2021.
ALSO SEE:
China Mobile Eyes Up To $8.8bn in Shanghai Listing
China Mobile Wins Nod for Shanghai Share Sale
China Mobile readies $8bn Shanghai listing after NYSE exit
NYSE starts process of delisting three Chinese telecoms companies
