(Bloomberg) -- Jack Ma’s Ant Group Co. won approval from the Hong Kong stock exchange for its initial public offering, clearing a key hurdle as the Chinese fintech giant races to complete the sale ahead of the U.S. election.Ant received a letter from the exchange to proceed with the Hong Kong IPO, a person familiar with the matter said. The firm now needs to complete a registration with Chinese regulators for the Shanghai portion of the sale, a person familiar said. A representative for the company declined to comment. The Hong Kong stock exchange declined to comment in an emailed statement.Once it has all the approvals in place, Ant will hold a roadshow of at least 3.5 days to pitch the shares to investors, the people said. That may give it enough time to price the offering as soon as next week, ahead of the U.S. election when some expect ballot counting delays to spark prolonged market volatility.The Hangzhou-based company is seeking to raise $35 billion in the dual listing, with about half to be raised in each of Hong Kong and Shanghai, people familiar with the matter have said. Ant’s IPO could be the world’s biggest, surpassing Saudi Aramco’s record $29 billion sale last year.“It looks like a very good deal, so people still have high enthusiasm for this IPO,” Shawn Yang, managing director at Blue Lotus Capital Advisors told Bloomberg TV, adding that the U.S. tension won’t curb interest. “Investors are more focused on fundamental issues like the growth and the competitive landscape. There are no obvious weaknesses for Ant at this point.”The tech giant could have an IPO valuation of at least $280 billion, people familiar have said, making it bigger than Bank of America Corp. and three times the size of Citigroup Inc.Alibaba Group Holding Ltd., which owns about a third of Ant, rose as much as 1.1% to HK$300.40 in Hong Kong, a record high since it began trading there last year.The one-week gap in Hong Kong between the pricing of an IPO and the start of trading means investors would be left exposed to an increase in volatility if Ant doesn’t complete the IPO before the Nov. 3 U.S. vote.People within the Trump administration are exploring possible bans on Ant, as well as rival Tencent Holdings Ltd., over concerns that their digital payment platforms threaten U.S. national security.Ant won’t seek so-called cornerstone investors for Hong Kong, but will invite big backers for its Shanghai sale to mitigate price fluctuations, people familiar have said. The firm is planning to issue new stock equal to about 11% to 15% of its outstanding shares, the people added. Cornerstone investors, more common in Hong Kong than in other markets, are usually large institutions that agree to hold the shares for about six months in exchange for a sizable allocation.Ant picked China International Capital Corp., Citigroup, JPMorgan Chase & Co. and Morgan Stanley to lead its Hong Kong offering. CICC and CSC Financial Co. are leading the Shanghai leg of the IPO.(Updates with details of roadshow in the third paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Intel Corp. agreed to sell its Nand memory unit to South Korea’s SK Hynix Inc. for about $9 billion, a deal that allows the U.S. chipmaker to concentrate on its main business while shoring up the Asian company’s position in a booming market.The chipmaker will pay 10.3 trillion won for the Intel unit, which makes flash memory components for computers and other devices. The acquisition, which will take place in stages through 2025, includes Intel’s solid-state drive, Nand flash and wafer businesses, as well as a production facility in the northeastern Chinese city of Dalian.The deal should shore up Hynix’s position in a business that’s boomed after Covid-19 drove demand for the chips used in everything from Apple Inc.’s iPhones to data centers. It whittles down another player in an industry the Korean company dominates alongside Samsung Electronics Co. and Micron Technology Inc., potentially buoying Nand flash prices. Hynix’s shares fell about 1.8% after analysts raised concerns about the price tag on its largest acquisition ever.“Hynix is now entering the hyperscale control chip business by purchasing Intel’s business. Although there is some skepticism about the price of the deal, I think this won’t be a burden because it will ensure solid long-term cash flow,” said Greg Roh, an analyst at HMC Securities. “The market consolidation is good news for Korean memory chipmakers, and will alleviate oversupply issues.”Read more: Intel ‘Stunning Failure’ Heralds End of Era for U.S. Chip SectorIntel has said for months it was exploring options for the flash group. Hynix however won’t be buying the Optane division, which develops chips that can permanently store data and read and write it faster than NAND -- if not faster than traditional DRAM. The product, which went on sale in 2018, was tested successfully by some large cloud providers and Alibaba Group Holding Ltd. used the technology to support its massive Singles’ Day sales. Bob Swan, Intel’s chief executive officer, described Optane as “something special” last year.The Korean company said it will pay Intel $7 billion before the end of 2021, then the rest by March 2025. Citigroup advised Hynix, while Bank of America did the same for Intel. The deal could allow Hynix to surpass Kioxia -- a Toshiba Corp. spinoff -- in the Nand flash market, in particular, according to Bloomberg Intelligence analyst Anthea Lai.What Bloomberg Intelligence SaysSK Hynix’s agreement to acquire Intel’s memory chip unit for 10.3 trillion won will help the South Korean chipmaker surpass its second-biggest rival Kioxia by NAND flash revenue, we calculate. The deal would consolidate the NAND market, with Samsung, SK Hynix and Kioxia commanding more than 70% of revenue share, aiding NAND price recovery and narrowing losses, in our view.\- Anthea Lai, analystClick here for the research.The acquisition also further streamlines Intel’s struggling empire. Since taking over in 2019, Swan has looked to sell several units that aren’t part of the company’s focus on processors for personal computers and servers.The Santa Clara, California-based company has delayed production of important upcoming chip lines and now lags behind some industry players in manufacturing technology. Its shares are down about 9% so far this year, while the benchmark Philadelphia Semiconductor Index is up almost 29%.Despite the delays, the company’s server group has been performing well. Shedding another non-core business could help Intel focus on fixing its chip technology woes.Intel unloaded its smartphone cellular modem group to Apple in 2019 and this year sold its home connectivity chips group to MaxLinear Inc. In July, the company said it was considering moving away from manufacturing its own chips, potentially benefiting contract producers such as Taiwan Semiconductor Manufacturing Co. and Samsung.Read more: Intel’s Latest Chip Push Suggests the Company Has a Short Memory(Updates with share action and analyst’s comment from the third paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Michael Verdeschi, Treasurer of Citigroup, will present at the 39th Annual BancAnalysts Association of Boston Conference on Friday, November 6, 2020. The presentation is expected to begin at approximately 11:20 a.m. (Eastern). A live webcast will be available at www.citigroup.com/citi/investor. A replay and transcript of the webcast will be available shortly after the event.