Sat, Dec 10, 2011 - Page 10 News List

Hong Kong jeweler IPO raises less than was expected

AFP, HONG KONG

Hong Kong-based Chow Tai Fook Jewellery Co (周大福珠寶) has raised a lower-than-expected US$2 billion from its share sale after pricing them at the bottom of its expected range, a report said yesterday.

The world’s biggest jewelry chain, with more than 1,300 outlets throughout Asia, had reportedly said it was aiming to raise US$2.8 billion from its initial public offering (IPO), one of the -biggest of the year in Hong Kong. The company sold 1.05 billion shares at HK$15 each, at the lower end of the HK$15-HK$21 indicative price range, and did not exercise its over-allotment option, Dow Jones Newswires quoted an unnamed source as saying.

The offer price values the firm at US$19.3 billion, the report added. It is scheduled to list on the Hong Kong Stock Exchange on Thursday.

Chow Tai Fook officials could not be reached for comment.

The company — a household name in China, but virtually unknown in the West — was hoping investors would snap up the offering to capitalize on the demand for luxury goods and the growth in personal wealth in China.

Chow Tai Fook has a large network of stores in China, plus outlets in Macau, Malaysia, Singapore and Taiwan. It plans to expand its number of stores to more than 2,000 by the end of 2016, according to its Web site.

Chow Tai Fook is among the list of giants using Hong Kong as a gateway to tap the Chinese market, following the listing of firms such as Italian luxury fashion house Prada, US handbag maker Coach and luggage maker Samsonite. Other branded companies looking at Hong Kong listing options include Aston Martin, Burberry, Ducati and Graff Diamonds.

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