Baidu’s Second Listing In Hong Kong To Bring In $3.1 Billion

Chinese search engine and tech giant Baidu, which specializes in artificial intelligence, raised $3.1 billion from a secondary listing in Hong Kong, South China Morning Post (SCMP) reported on Wednesday (March 17).

Baidu’s 95 million shares — which account for roughly 3.4 percent of its share capital — will start trading in Hong Kong on March 23. Shares were priced at HK$252 each, almost 3 percent below Nasdaq’s close on Tuesday (March 16) of $266.78. An over-allotment option would let Baidu sell up to 14.3 million additional shares.

This is the second time so far this year that a U.S.-listed tech company from China sought a secondary listing in Hong Kong. Chinese digital car sales platform Autohome filed in Hong Kong earlier this month, raising $688 million.

Year to date, there have been 26 initial public offerings (IPOs) completed, raising $10.8 billion, which is five times more volume when compared to the same period a year ago, according to Refinitiv data, per SCMP.

Baidu will use some of the funds raised to further invest in artificial intelligence (AI), including its AI cloud unit and its self-driving vehicle platform Apollo.

Bank of America, Citic Securities and Goldman Sachs are the joint sponsors and global coordinators of the transaction, SCMP reported.

Tencent Music Entertainment Group and the video site Bilibili are also looking to have secondary listings in Hong Kong, Bloomberg reported.

Hong Kong’s bourse is now home to an increasing number of technology firms looking to trade in Hong Kong’s Central District.

Worldwide, IPOs could break records in the first quarter, in part due to the rise in purpose acquisition companies (SPACs), also known as blank check companies. 

Baidu and Tencent were fined by Chinese regulators last week for previously made acquisitions and prior investments. Alibaba could get fined beyond the $975 million that Qualcomm paid six years ago.

Ant Group’s planned IPO at the end of last year was suddenly pulled by regulators. Since then, the company was told to restructure and its CEO Simon Hu resigned.