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Major investors give Ant’s share buyback the cold shoulder following a sharp 70% valuation dip – Bloomberg News

(Reuters) -Well, you know what they say about all that glitters not being gold. And that’s pretty much the case with Ant Group’s planned share buyback, which a good chunk of international investors are giving a wide berth. Why? Well, it all boils down to the whopping 70% nose-dive the Chinese fintech’s valuation took, according to a Bloomberg News piece that hit the newsstands this Monday.

Who’s playing hard to get, you ask? Heavy hitters like Warburg Pincus, the Canada Pension Plan Investment Board (CPPIB), the Carlyle Group (NASDAQ:CG), and GIC Pte are playing it cool, opting to keep their shares tucked away for now, sources close to the matter told Bloomberg.

Yet, every cloud has a silver lining, or so they say. Despite the turmoil, a few canny fund managers, including the teams at Fidelity Investments and T. Rowe Price Group, have taken the plunge and agreed to offload their stakes, the report pointed out.

Earlier in July, out of the blue, Ant Group threw a curveball, announcing a rather surprising share buyback. They proposed to repurchase up to 7.6% of their equity, pegging the price at a group valuation of a cool 567.1 billion yuan (that’s roughly $78.68 billion, give or take a few cents).

But here’s the kicker. This move was a steep cut-price deal, offering a staggering 75% discount compared to their sky-high $315 billion valuation back in 2020. Back then, the world was their oyster, and they were on track for the biggest IPO the globe had ever seen. But alas, Chinese regulators pulled the rug from under them at the eleventh hour, leaving the IPO high and dry.

Rewinding a bit, back in 2018, Ant Group had global investors like Warburg, GIC, and Carlyle pouring money into it during a fundraising round, with a valuation tag of a cool $150 billion.

But when their IPO got axed and the regulators forced Ant into restructuring, it was like a house of cards coming down. Some global investors didn’t beat around the bush and slashed their valuation of the company, with Fidelity chopping it down to $68 billion in mid 2021, according to previous reports by Reuters.

It’s been pretty much radio silence from Ant Group, Carlyle Group, CPPIB, Warburg Pincus, GIC, and T. Rowe Price Group, with all of them choosing to zip their lips when approached for a comment.

As for Fidelity Investments, they’re keeping us in suspense, not responding immediately to Reuters’ repeated attempts to get a comment.

($1 = 7.2081 Chinese yuan renminbi)

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