A telecom tower in Mexico. (Photographer: Susana Gonzalez/Bloomberg)

China Tower Seeks to Raise Up to $8.7 Billion in Hong Kong IPO

(Bloomberg) -- China Tower Corp., the state-owned wireless infrastructure operator, is seeking as much as $8.7 billion in its planned Hong Kong initial public offering.

The world’s largest telecom tower service is offering 43.1 billion shares at HK$1.26 to HK$1.58 each, according to terms for the deal obtained by Bloomberg. Hillhouse Capital and a unit of Alibaba Group Holding Ltd. are among the 10 firms that agreed to buy about $1.4 billion of shares as cornerstone investors, the terms show.

China Tower is pursuing the world’s biggest IPO in almost four years amid a slump in the Hong Kong equity market, with the benchmark Hang Seng Index trading down about 15 percent from its all-time high in January. Xiaomi Corp.’s $5.4 billion IPO -- the city’s other hotly anticipated offering this year -- priced at the bottom of its marketed range, valuing the phone maker at about half its original target.

An $8.7 billion China Tower deal would be the world’s biggest first-time share sale since Alibaba’s $25 billion U.S. stock offering in 2014, according to data compiled by Bloomberg. China Tower starts taking investor orders Monday, with pricing expected Aug. 1 Hong Kong time, according to the terms. Shares are expected to begin trading Aug. 8.

Hillhouse funds agreed to invest $400 million, while Taobao China Holding Ltd. has committed to buy about $100 million of shares in the IPO, the terms show. Och-Ziff Capital Management Group LLC agreed to invest $300 million.

China Tower was formed by combining tower assets of China Mobile Ltd., China Unicom Hong Kong Ltd. and China Telecom Corp. in 2015 as part of a broader plan to reform the nation’s state-dominated wireless industry.

China International Capital Corp. and Goldman Sachs Group Inc. are joint sponsors for the planned deal.

Other cornerstone investors include affiliates of China National Petroleum Corp., SAIC Motor Corp. and Industrial & Commercial Bank of China Ltd., according to the terms.

©2018 Bloomberg L.P.