Agricultural Bank of China (AgBank) <1288.HK><601288.SS> has fully exercised an over-allotment option for the Shanghai portion of its initial public offering, taking the total proceeds from the offer to $22.1 billion, making the IPO the world's biggest.
The exercise of the over-allotment, also known as greenshoe, pushed AgBank's Hong Kong and Shanghai offering past Industrial and Commercial Bank of China's (ICBC) <1398.HK><601398.SS> $21.9 billion IPO in 2007, and reflects solid demand for its shares in the secondary market.
The strong performance encouraged China's No. 3 lender by assets to sell extra shares in Shanghai on Friday, two banking sources with direct knowledge of the deal said, after selling additional shares in Hong Kong last month.
Over-allotments, or greenshoes, are released when demand for the shares in the after-market is heavy. Underwriters release the shares, set aside at the original IPO price, to the allocated holders who then become public stockholders.
(Reporting by Victoria Bi, Samuel Shen and Jason Subler; Editing by Denny Thomas and Jacqueline Wong)