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Yum China Holdings files for secondary listing in Hong Kong

written by Bella Palmer

The company plans to sell over 41 million shares, which could raise as much as around £1.87 billion ($2.5 billion) for the company

Yum China Holdings filed for a secondary listing in Hong Kong on Friday, becoming the latest New York-traded Chinese company to seek an alternative capital market closer to home amid rising tensions between Beijing and Washington.

The company, which operates chains including KFC, Taco Bell and Pizza Hut in China, plans to sell over 41 million shares at a maximum of 468.00 Hong Kong dollars, or £45.23 each, according to its prospectus. The offering, which will take place in about a week, could raise as much as around £1.87 billion ($2.5 billion) for the company.

Yum China's landing on the Hong Kong stock exchange will follow high-profile secondary listings there of Alibaba Group Holding, and NetEase, which all took place within the last year and collectively raised more than £14.98 billion ($20 billion).

Our secondary listing in Hong Kong will provide an additional access point for our stakeholders to invest in our company, closer to where we operate, where our customers and communities thrive, Yum China said in the prospectus.

The Nikkei Asian Review first reported that the company was considering a secondary listing in Hong Kong in January. People familiar with the plans have told Nikkei that rising tensions between the U.S. and China are the key driver behind the listings.

Both the White House and the U.S. Senate are pushing for rules that would delist Chinese companies that American auditors lack access to -- a development that has rattled New York-listed companies from the mainland.

Search giant Baidu and delivery chain ZTO Express are among companies traded on American markets that are considering secondary listings in Hong Kong, Nikkei has reported.

Meanwhile, Alibaba's fintech spinoff Ant Group has forgone New York and chosen Hong Kong as one of its listing locations, in addition to Shanghai, for its initial public offering. People familiar with the matter have told Nikkei that Ant aims to raise £22.47 billion ($30 billion), which would make it the biggest IPO to date.

In 1987, KFC made its China debut in Beijing, opening the largest KFC outlet in the world at that time and the first-ever Western chain restaurant in China, according to the prospectus.

Shares in Yum China, which went public on the New York Stock Exchange in 2016 after being spun off from American parent Yum! Brands, were up nearly 3% at £42.57 ($56.83) in Friday afternoon trading.


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