Agricultural Bank of China invites bids for IPO

Lender may acquire $29bln as it invited 20 bidders for China and Hong Kong IPO.

Agricultural Bank of China, the country’s third-biggest by assets, invited more than 20 banks to bid for mandates to arrange its initial public offerings in China and Hong Kong, said four people with knowledge of the plan.

The state-owned bank based in Beijing sent out requests for proposals to 21 banks on April 2 to compete for a role to manage a share offering in Hong Kong, said the people, who declined to be identified as the information is private. Ten banks including some foreign companies licensed to arrange yuan share sales were asked to bid for a mainland offering, one of the people said.

The lender may raise as much as 200 billion yuan ($29.3 billion) through the share sales, Securities Times quoted Li Fuan, head of the banking innovation department at the China Banking Regulatory Commission, as saying in December. A combined sale in Hong Kong and China of that size would make it the world’s biggest offering, topping the $22 billion raised by bigger rival Industrial & Commercial Bank of China Ltd. in 2006.

“All the big banks are raising capital this year and market liquidity will be under some stress,” said Nan Sheng, a Shanghai-based analyst at UOB Kayhian Investment Co. The low valuations of listed Chinese banks currently will “to some extent restrict” Agricultural Bank’s issue price.

View the full story in Business Week.