July 23, 2018 / 2:22 AM / a month ago

China Tower secures cornerstones, sets price range for $8.7 bln HK IPO - sources

HONG KONG, July 23 (Reuters/IFR) - China Tower, the world’s largest telecoms tower operator, has lined up $1.4 billion from 10 cornerstone investors for its Hong Kong initial public offering (IPO) of up to $8.7 billion, in what would be the world's biggest listing in four years, five people close to the deal told Reuters.

The Beijing-based mobile phone infrastructure firm has set an indicative price range of HK$1.26 to HK$1.58 ($0.16-$0.20) per share for its float, valuing it at between $28 billion and $35 billion, said the people.

China Tower's deal is seen as a key test of the Hong Kong IPO market as investors consider several big deals. Earlier this month smartphone maker Xiaomi priced its IPO at the bottom of its range in a $5.4 billion deal while online on-demand operator Meituan Dianping is expected to raise more than $4 billion when it floats in the coming months.

Chinese investment firm Hillhouse Capital Group made the biggest commitment of $400 million, followed by U.S. fund firm Och-Ziff Capital Management, which is pledging $300 million, the sources said.

Other cornerstones include a unit of Alibaba Group, China National Petroleum Corporation's CNPC Capital, and two U.S funds, Darsana Master Fund and Invus Public Equities.

China Tower plans to sell about 43.1 billion shares, or 25 percent of its enlarged share capital, according to the people. It will open books to institutional investors on Monday and price the deal on August 1.

China Tower, Alibaba and Och-Ziff declined to comment. Hillhouse and CNPC didn't immediately respond to a request for comment. Darsana and Invus couldn't immediately be reached for comment. ($1 = 7.8494 Hong Kong dollars) (Reporting by Fiona Lau of IFR and Julie Zhu; Editing by Jennifer Hughes and Muralikumar Anantharaman)

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