China’s JD Logistics plans to raise HK$8.53 billion ($1.1 billion) through the issuance of new shares, according to a Hong Kong stock exchange filing on Friday.
The deal consists of a placement of about $700 million worth of shares to its parent company JD.com and about $400 million in a primary share sale, the filing showed.
The price set will apply to both tranches of the deal, a term sheet for the transaction showed. JD Logistics’ capital raising was priced at a discount of about 10% to Thursday’s closing price of HK$23.
The stock fell by up to 11% on Friday in early trade to HK$20.35.
“JD Logistics’ core competence is integrated supply chain networks, which will continue to enhance its competitive edge and address customer pain points,” Thomas Chong, an equity analyst at Jefferies, said.
It was the first follow-on share sale in Hong Kong since February 21, and the biggest since Sunac China carried out a $580 milllion top-up placement in early January.
It was also the third-largest follow-on deal in Asia and fifth globally this year, according to Refinitiv data.
The top 15 investors who bid during the bookbuild were allocated 80% of the stock that was on offer, according to a source with direct knowledge of the matter.
JD.com did not immediately respond to a request for comment on the deal’s composition.
The issuance follows the company’s bid for Deppon, which provides a wide range of logistics including transport, delivery services and warehousing management in China.
“The goal of the deal is the privatisation of Deppon and the deal aims to generate synergies for both companies,” Chong added.
- Reuters, with additional editing by George Russell
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