Yum China is set to price its secondary offering in Hong Kong at a slight discount to its US share price, putting the fast food-chain operator on track to raise more than $2bn.
The company, which is holding the latest “homecoming” listing by a major US-listed Chinese company, is aiming to price the offering at HK$412 ($53.16) a share, people with knowledge of the matter said.
This would put it on course to raise nearly HK$17.3bn from the sale of close to 42m shares, or a discount of almost 5 per cent to the closing level of its US stock on Thursday.
Yum China, which operates KFC, Pizza Hut and Taco bell restaurants in China, is the latest big-ticket Chinese company with a listing in the US to price shares in Hong Kong as tensions between Beijing and Washington reach their worst state in decades.
The Trump administration has proposed forcing Chinese companies to delist from the Nasdaq and New York Stock Exchange unless American regulators are given access to the work papers from audit reports, after the Senate passed legislation in May to the same effect.
That has spurred some of the largest Chinese groups listed in the US to launch back-up offerings in Hong Kong in case they are forced to delist. So far this year, gaming group NetEase has raised almost $3bn with its own Hong Kong listing, while online retail group JD.com raised nearly $4bn.
The homecomings are a boon for Hong Kong’s financial industry, with China Renaissance Securities estimating 32 Chinese companies with total market capitalisation of nearly $200bn qualify for a secondary share offering in the Asian financial hub.
US-China tensions have also convinced some major tech companies to avoid listing in New York entirely. Ant Group, the Chinese payments company controlled by Alibaba, is expected to offer up to 15 per cent of its shares in Hong Kong and Shanghai in an initial public offering that could raise a record $30bn, which would make it the world’s largest IPO.
Alibaba, which last year raised almost $13bn with its own share offering in Hong Kong, was added to the territory’s benchmark Hang Seng index last month in a shift investors said reflected the growing dominance of mainland Chinese tech groups in the city.