Three law firms, Skadden, Arps, Slate, Meagher & Flom, Davis Polk & Wardwell, and Clifford Chance, had the lead roles on a $1.1 billion Hong Kong listing of Chinese tech giant Tencent Holdings’ ebook spin-off—one of the hottest offerings to hit the Hong Kong Stock Exchange this year.
China Literature Ltd.—Tencent’s answer to Amazon.com Inc.’s Kindle—listed on the Hong Kong Stock Exchange on Wednesday in the first initial public offering by a Chinese online publishing company, and a rare big-ticket Hong Kong listing by a Chinese technology company.
Tencent itself, a software developer-turned-technology-conglomerate, has been listed in Hong Kong since 2004, whereas rival Alibaba Group Holding Ltd. and other internet companies have chosen the New York Stock Exchange.
The IPO was highly oversubscribed, with investors bidding for 625 times the shares on offer, making it one of the most sought-after listings by investors in Hong Kong. In September, an online insurance company backed by both Alibaba and Tencent, ZhongAn Online Property and Casualty Insurance Co. Ltd., raised $1.5 billion in a Hong Kong IPO.
Skadden advised issuer China Literature on Hong Kong and U.S. law with a team led by China practice head Julie Gao and corporate partner Christopher Betts in Hong Kong and corporate partner Haiping Li in Shanghai. All three also represented ZhongAn on its IPO in September.
Han Kun Law Offices Beijing partner Charles Li and Shanghai partner Kelvin Gao acted as Chinese counsel to the issuer.
China Literature’s parent Tencent turned to regular counsel Davis Polk, where Hong Kong partner Bonnie Chan led the team.
Clifford Chance Hong Kong partners Amy Lo and Fang Liu, and Beijing partner Tim Wang, represented Morgan Stanley, Bank of America Merrill Lynch and Credit Suisse as joint sponsors on the deal.
Chinese law advice was provided to the banks by Grandall Law Firm in Shanghai.
Shanghai-based China Literature was formed in 2015 when Tencent’s own e-reading arm acquired China’s largest online publishing company Cloudary Corp., previously part of game developer Shanda Group.
The company runs more than a dozen websites and mobile apps for ebooks and serialized fiction and had 173 million average monthly users as of December 2016.