Jack Ma becomes richer than Walmart heirs with mega Ant IPO

[HONG KONG] Jack Ma, the former English teacher who co-founded Alibaba Group Holding with US$60,000, is poised to become the world's 11th richest person after Ant Group priced shares for a record initial public offering (IPO).

Mr Ma's 8.8 per cent stake is worth US$27.4 billion based on the stock pricing in Hong Kong and Shanghai. That will take the 56-year-old's fortune to US$71.6 billion on the Bloomberg Billionaires Index, exceeding that of Oracle's Larry Ellison, L'Oreal heiress Francoise Bettencourt Meyers and individual members of the Waltons, whose family own Walmart.

Ant's mammoth listing is poised to boost the fortunes of a group of early investors and employees. The company has granted staff share-based awards since 2014 and at least 18 other people have become billionaires from the IPO.

Lucy Peng, a director at the payments giant through August, is the biggest individual Ant owner after Mr Ma, and has a US$5.2 billion stake. Chairman Eric Jing's holding is worth US$3.1 billion.

Ant is set to raise almost US$35 billion, beating Saudi Aramco's US$29 billion sale last year. The Shanghai stock priced at 68.8 yuan apiece and its Hong Kong shares at HK$80 each. The company could raise another US$5.2 billion if it exercises its green shoe options, taking its market value to about US$320 billion. That would be more than JPMorgan Chase & Co and four times bigger than Goldman Sachs Group.

The big winners of the listing own their stakes through two limited partnerships registered in Hangzhou that together hold about 40 per cent of Ant. Alibaba, in turn, has a third of the fintech firm. Hong Kong's Li Ka-shing, the family behind a French supermarket giant, the son of a Taiwanese real estate billionaire and Chinese retail tycoon Shen Guojun are among the other owners who have invested in the company over the year.

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Ant began when Alibaba launched the Alipay payments app in 2004 as an escrow service for buyers and sellers on Mr Ma's e-commerce website. In 2013, they were given the ability to save money and earn interest on the balances stored on their accounts. The firm then started offering credit to small businesses, branching out from its consumer-finance focus, and eventually expanded to services such as block chain, cloud computing and artificial intelligence.

Since co-founding Alibaba with Mr Ma, Ms Peng served in different roles. She set up Alibaba's human-resources department and, after helping create Ant, was its chief executive officer until Mr Jing took over in 2016. Two years later, he succeeded her as executive chairman of the fintech company.

Both Ms Peng and Mr Jing are members of the Alibaba Partnership, a 36-person group with the power to determine the annual cash bonuses for all members of management.

BLOOMBERG