Midea prices Hong Kong IPO – biggest in 3 years – at top of range to raise US$3.46 billion

The initial public offering (IPO) of Chinese appliance maker Midea has been priced at the top of the anticipated range amid intense investor interest, as the blockbuster deal gives Hong Kong’s fund-raising market a much-needed shot in the arm after more than three years of relatively feeble performance.

The world’s largest maker of home appliances will raise HK$26.97 billion (US$3.46 billion) after setting the IPO price at the top of its range of HK$52 to HK$54.80, according to investment bankers involved in the underwriting. It will be the city’s biggest new listing in more than three years.

The IPO received “very strong demand from global investors”, and is “multiple times oversubscribed”, said an investment banker who is directly involved in the offering.

“Amid the current poor market sentiment in Hong Kong, a successful jumbo IPO like the Midea offering can help improve market sentiment,” said Tom Chan Pak-lam, the permanent honorary president of the Institute of Securities Dealers, a brokers’ industry body. “It is likely to bring in more mega deals in the Hong Kong markets in the future.”

The international tranches of the offering, representing 95 per cent of the 492.14 million new shares, were oversubscribed on the first day they were offered on Monday, according to people involved in the underwriting process.