China’s Topsports raises $1.01b in Hong Kong IPO

Photo by Edgar Chaparro on Unsplash

Chinese sportswear manufacturer Topsports International Holdings Ltd has raised $1.01 billion after pricing its shares at HK$8.50 in a Hong Kong initial public offering (IPO), a term sheet for the deal showed on Thursday.

The stock priced toward the lower end of a marketing range of HK$8.30 to HK$10.10 ($1.06 to $1.29).

It is due to start trading on Oct. 10, the term sheet showed.

The sale is the latest test of investment sentiment in Hong Kong which has seen increasingly violent political protests.

The Hang Seng Index has lost 4.3% since the protests began in mid-June though is still 1% higher than at the same point last year, Refinitiv data showed.

Last month Anheuser-Busch InBev NV unit Budweiser Brewing Company APAC Ltd also priced at the bottom of its HK$27-30 range to raise $5 billion. The stock gained 6% in its first session on Monday and is now at $29.60.

Topsports‘ raising was also carried out during a fraught U.S. trading session with the Dow Jones Index shedding 494.42 points, or 1.86%, in its largest one-day percentage fall since Aug. 23.

Topsports initially aimed to raise up to $1.2 billion, the term sheet showed. Ultimately, it raised $1.01 billion and has an overallotment – or greenshoe – option allowing it to sell stock worth an extra $160 million depending on demand, the people said.

Topsports declined to comment. The people with knowledge of the matter declined to comment as they were not authorised to speak with media.

Topsports is the largest sportswear retailer in China by retail sales value, with a 15.9% market share in 2018, the company said in its IPO prospectus, citing consultants Frost & Sullivan.

It distributes and is a retail partner with global sportswear makers Nike Inc and Adidas AG.

The IPO was sponsored by Bank of America Merrill Lynch and Morgan Stanley. With $1 billion raised, the firm has a market capitalisation of about $6.74 billion, the term sheet showed.

Topsports previously said it would use 9.7% of the proceeds to invest in technology, nearly 27% to repay short-term bank loans and 45% to repay debt to parent Belle International Holdings Ltd.

Belle International was privatised by Hillhouse Capital Group and CDH Investments in July 2017 in a deal worth $6.8 billion.

Reuters

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.