CHINA'S "GOOGLE" FINDS A PRICE FOR ITSELF

Global Finance, Sep 2005 by Platt, Gordon

DR NEWS

Baidu.com, China's most-popular Web search engine, rose 354% in its August 5 debut, making it the hottest initial public offering in five years. While the IPO for a 13% stake in the company, which is patterned after Google, created a buzz on Wall Street, the offering of American depositary shares was also designed to put a price on Baidu for a potential future sale. Google, which holds a 2.6% share of Baidu, is one possible suitor. California-based Google is China's second-most-popular search engine.

The price set for the Baidu IPO of $27 a share, was higher than its $23-$25 estimated range, which was increased from an earlier estimate of $19-$21. In first-day trading on Nasdag, the shares hit a high of $151.21 and closed at $122.54.

The size of the offering was increased to 4.04 million American depositary shares from 3.6 million. The underwriters were Goldman Sachs, Credit Suisse and Piper Jaffray.

Baidu, pronounced "buy-do," is a well-known brand in China. The name was taken from an ancient Chinese poem about a man picking out the face of his lover in a crowd. Meanwhile, capital raised by non-US companies using depositary receipts rose 121% to $7.9 billion in the first half of 2005 from the same period of 2004, according to a report by Citigroup. Asian companies accounted for 36% of the total, Western European companies for 32%, and Eastern European companies for 29%.

Citigroup said a continued positive US investor sentiment toward non-US markets is evidenced by growing cash flows to international mutual funds. -GP

Copyright Global Finance Media Inc. Sep 2005
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