Chow Tai Fook hires underwriters for IPO
today May 25, 2011
May 24 - Jewellery retailer Chow Tai Fook, controlled by billionaire Cheng Yu-tung, has hired Deutsche Bank AG, Goldman Sachs Group Inc, HSBC Holdings Plc and JPMorgan Chase & Co as the main underwriters for its Hong Kong IPO, said a source familiar with the matter.
Chow Tai Fook store on Queen's Road Central, Hong Kong. (Photo by Wikipedia user ShingWong)
The company could raise $3 billion (1.85 billion pounds) from the initial public offering, slated for the first quarter of 2012, Thomson Reuters publication IFR reported late on Monday.
he retailer had also hired Citigroup Inc, Credit Suisse Group AG and UBS AG, to underwrite the offer, the source told Reuters on Tuesday.
The source was not authorised to speak to media as the mandates had not yet been made public. Chow Tai Fook officials were not immediately available for comment.
Consumption of luxury items in China, the world's second-largest economy, has surged at double-digit rates in recent years as a new class of consumers snaps up jewellery from Tiffany & Co, ties and scarves from Hermes International SCA and handbags from LVMH Moet Hennessy Louis Vuitton SA.
Chow Tai Fook, founded by Cheng's father-in-law Chow Chi Yuen in Guangzhou in 1929, has 1,400 stores, mostly in greater China. It competes with domestic players, such as Luk Fook Holdings (International) Ltd and Emperor Watch and Jewellery Ltd, and foreign brands such Tiffany.
"We aim to open 200 stores every year, with 90 percent of them in China," Alan Chan, Chow Tai Fook Jewellery's global branding director, told the Reuters Global Luxury Summit in Hong Kong on Monday.
China would likely account for 20 percent of the global luxury market by 2015, with spending expected to nearly triple to $27 billion from about $10 billion in 2009, according to consulting firm McKinsey & Co.
By Elzio Barreto and Fiona Lau
(Editing by Denny Thomas and Chris Lewis)
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