JD Health plans to raise $3.5 billion in Hong Kong IPO: term sheet

HONG KONG (Reuters) – JD Health International Inc is seeking to raise up to $3.5 billion by selling 381.9 million shares in a range of HK$62.80 and HK$70.58 at its Hong Kong initial public offering (IPO), according to a term sheet obtained by Reuters.

There is a greenshoe option to sell a further 15% of stock in the online healthcare platform of China’s e-commerce giant JD.com that would take the size of the IPO, set to be Hong Kong’s biggest this year, up to $4 billion.

The initial size of the deal represents 12.2% of JD Health’s enlarged share capital and the greenshoe, if exercised, will take that to 13.8%. At that size, JD Health could be valued at nearly $29 billion.

Six cornerstone investors led by GIC, Tiger Global and BlackRock have taken up to $1.35 billion worth of stock in the deal, the term sheet showed.

Hillhouse Capital, an early investor in JD Health, has subscribed for up to $151 million worth of shares, the term sheet showed.

Cornerstone shares will be locked up for six months.

A majority of the deal, 95%, will be for institutional investors while 5% has been earmarked for retail shareholders.

JD Health management will start roadshow presentations to investors Wednesday, according to one source with direct knowledge of the matter who could not be named as he was not authorised to speak to media.

The book build begins on Wednesday and the shares are due to be priced on Tuesday, according to the term sheet.

JD Health shares are expected to start trading on Dec. 8.

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