Agricultural Bank of China edges closer to record IPO

Jul 8, 2010, 13:16 GMT

Beijing - The Agricultural Bank of China edged closer to the world's highest initial public offering on Thursday with official confirmation of the pricing and an additional share allocation.

The bank said it had priced 25.57 billion Shanghai-listed shares at 2.68 yuan each (40 US cents), the top of its indicated price range. It also allocated an additional 15 per cent of stocks for a 'greenshoe' option in case of oversubscription, it said.

Twenty-seven strategic investors had agreed to buy 10.23 billion of the Shanghai shares, the bank said in a statement.

A greenshoe option consists of extra shares made available to meet high demand for a new issue to stabilize the stock price in the first days of trading.

The Beijing-based bank is also offering 25.4 billion shares to be listed in Hong Kong at 3.20 Hong Kong dollars each (41 US cents), according to Chinese media reports.

But the bank had still not confirmed the price of the Hong Kong shares as of Thursday evening.

The dual listing would net the bank 22.1 billion dollars if the reports of its Hong Kong price are correct, overtaking the world record 21.9 billion dollars raised by the Industrial and Commercial Bank of China in October 2006.

The Agricultural Bank of China, the third-largest lender of China's 'big four' banks, plans to start trading its new shares on July 15 in Shanghai and July 16 in Hong Kong.