Ant's surprise share buyback values firm at steep 75% discount to IPO
By Julie Zhu and Josh Ye
HONG KONG (Reuters) -Ant Group on Saturday announced a surprise share buyback that values the fintech giant at $78.54 billion, well below the $315 billion touted in an abandoned IPO in 2020, in a move that may let some investors exit after a lengthy regulatory overhaul of the firm.
The news came one day after Ant was fined $984 million, which should end a years-long regulatory shake-up of the company and mark a key step to concluding a crackdown on the country's internet sector.
Ant said it had proposed to all of its shareholders to repurchase up to 7.6% of its equity interest at a price that represents a group valuation of approximately 567.1 billion yuan ($78.54 billion).
That represents a steep 75% discount to the $315 billion valuation in 2020 for what was set to be the world's largest IPO had it not been derailed at the last minute by Chinese regulators.
«The repurchased shares will be transferred into Ant Group's employee incentive plans to attract talents. The repurchase proposal will also provide a liquidity option for the company's investors,» it said.
Ant's major shareholders, Hangzhou Junhan Equity Investment Partnership and Hangzhou Junao Equity Investment Partnership, have voluntarily decided not to participate in the repurchase, the company added.
Hangzhou Junhan and Hangzhou Junao are the entities that collectively hold more than 50% of Ant's shares on behalf of the company's executives and employees.
«While Ant buys back shares at a valuation much lower than the $150 billion figure in the company's last fundraising round in 2018, the plan provides some liquidity to its existing investors,» said Zhang Zihua, chief investment officer at Beijing Yunyi Asset Management which is an
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