Investors are snapping up shares in CK Life Sciences International, the biotech venture of tycoon Li Ka-shing, but the response was nothing like the stampede seen during the initial public offering of his Internet venture, Tom.com, two years ago.
CK Life said yesterday that its IPO was 121 times oversubscribed by retail investors betting that anything connected with Li, Asia's richest man, is a sure thing.
Due to strong demand, under a process known as a "clawback mechanism," the ratio of shares allotted to retail investors will rise from the original 10 percent to 50 percent, local news reports said.
The reports said that institutional buying was 10 times oversubscribed.
CK Life, a biotechnology spinoff from property developer Cheung Kong (Holdings) Ltd, was set up in 1999 and plans a July 16 listing Hong Kong's tech-oriented Growth Enterprise Market. It offered a total of 1.307 billion shares priced between HK$1.80 and HK$2 per share.
The venture does not expect to post profits for another several years and so far has launched only one commercial product, an environmentally friendly fertilizer called NeutraSmart.
Meanwhile, billionaire Li says he won't rule out taking a bigger stake than the one-third of Asia Television Ltd he's already buying.
His Internet and media unit, Tom.com Ltd, said yesterday it will issue new shares to pay HK$290 million (US$37 million) for Lai Sun Development Ltd's 32.75 percent stake in Hong Kong's No. 2 television station.
The transaction brings Hong Kong's richest man into the television business for the first time. Tom.com shares rose as much as 9 percent after the announcement and recently traded at HK$3.575, up 7.5 percent.
The purchase "shows Tom.com's commitment to becoming a media company in the China region," said Norman Chan, head of investment research at Allen Perkins Ltd, a private investment firm.
Li is stepping in after Asia Television scrapped a public share sale last year as media stocks plunged on fading Internet profit hopes. Tom.com may merge television with its magazine and ad businesses rather than its Web site, analysts said.
The purchase of Lai Sun Development Ltd's 32.75 percent stake in Asia Television makes Tom.com the second-biggest shareholder after Asia Television Chairman Liu Changle, a former officer in China's People's Liberation Army.
"I am leaving everything to Tom.com's management," Li told said. "I fully support the transaction."
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