Computer tech giant Lenovo’s largest shareholder is planning to launch a July IPO in Hong Kong that could potentially raise up to $3 billion, in what is seen to be one of the biggest listings in Asian markets this year.
Beijing-based Legend Holdings Corp., one of China's oldest state-linked conglomerates, is planning on submitting an application to the Hong Kong stock exchange to green-light the listing in the coming weeks, insider sources told the Wall Street Journal on Monday.
If Legend's initial public offering proves successful in raising $3 billion, it would surpass the biggest recent listings in the Asia-Pacific region, the Wall Street Journal said in its report.
So far, the largest Asian IPO for 2014 was a $1.7-billion offering by Jasmine Broadband Internet Growth Infrastructure Fund in Bangkok in February, followed by a $750-million IPO earlier this March by Hong Kong-based broadband provider HKBN Ltd.
Legend, which holds the 30.6-percent majority stake in Lenovo, was founded in 1984 by Liu Chuanzhi and 10 other researchers using funding from the Chinese Academy of Science, a government research think tank.
Aside from its stake in Lenovo, which went public in Hong Kong 20 years ago, Legend also has interests in real estate across China and controls Hony Capital, a private-equity firm. Liu, who also serves as Legend's chairman, and the Chinese Academy of Science's investment arm are also the conglomerate's major shareholders, one of the sources said.
The conglomerate previously made international headlines in 2005 when Lenovo acquired IBM's PC business, including the ownership of the ThinkPad brand of laptops, in one of the earliest acquisitions by a Chinese company of a high-profile brand.
Legend's total revenue reached 244 billion yuan ($39 billion) in 2013, with assets totaling 207 billion yuan. Lenovo posted a 14-percent increase in revenue to $38.7 billion for the full year that ended in March 2014, largely due to robust sales of both PCs and smartphones.
Analysts see Legend's Hong Kong listing as a foothold in a stock market that has a huge base of foreign institutional investors as well as advantage that could benefit the conglomerate's aspirations for overseas expansion.
In July 2014, Legend's private-equity arm Hony purchased PizzaExpress for $1.54 billion, adding the U.K.-based pizza chain to its domestic holdings, which include New China Life Insurance Co. and Changsha Zoomlion Heavy Industry Science & Technology Development Co., a construction machinery manufacturer.