Lufax Holding Ltd., a smaller rival to Chinese financial-technology giant Ant Group Co., is seeking to raise as much as $2.4 billion from an initial public offering in the U.S.
The deal is likely to put a substantially lower value on Lufax—which has reinvented itself after China cracked down on peer-to-peer lending, once a key business line—than a private fundraising last year.
Lufax, which operates online lending and investment platforms, aims to sell 175 million American depositary shares in a range of $11.50 to $13.50 each, according to a filing Thursday. That implies a market value of $28.1 billion to $32.9 billion, based on the postdeal share count in its listing prospectus.
In early 2019 it was valued at $39.4 billion after raising $1.4 billion of new funds, according to filings by
Ping An Insurance
(Group) Co., a major shareholder in the company.
Banks underwriting the deal have the option to increase its size by 15%. Depending on where it prices, if the banks exercise that option this could be the biggest Chinese IPO in the U.S. since
Alibaba Group Holding Ltd.
’s $25 billion debut in 2014, Dealogic data shows. The next-largest such share sale was by
KE Holdings Inc.,
an online real-estate brokerage that went public in August and raised $2.44 billion.
The stock sale comes as Ant prepares to list in Hong Kong and Shanghai.
Lufax’s targeted valuation reflects heightened volatility in the run-up to the U.S. presidential election on Nov. 3, and its desire to ensure a good secondary-market performance for its shares, a person familiar with the matter said. The deal is likely to price on Oct. 29 and start trading a day later, this person said. Lufax’s stock ticker is LU.
A spokeswoman for Shanghai-based Lufax said it couldn’t comment during a quiet period ahead of the listing.
Lufax has opted for a U.S. IPO even as some other Chinese companies seek listings closer to home, amid tensions between the world’s two biggest economies. The company had previously considered listing in Hong Kong.
Earlier this year China-based research group Hurun ranked Lufax as the world’s fourth most valuable unicorn, or $1 billion-plus startup. It plans to use the money it raises for product development, sales and marketing, technology infrastructure, and on potential takeovers.
Lufax was a major player in peer-to-peer lending but transformed itself after China cracked down on the industry, which saw scandals and a wave of public protests in 2018. The company in 2019 stopped offering peer-lending products, and stopped taking funds from small investors to back loans to other individuals.
The company’s wealth-management clients held $53 billion of assets as of June, and individuals had $73.5 billion of loans outstanding that had been enabled by its platforms.
Write to Joanne Chiu at joanne.chiu@wsj.com
Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
