China Mobile to buy back $12.6b of its HK shares

China Mobile Ltd will buy back up to $12.6 billion worth of its Hong Kong listed shares on the market, as the company prepares for its 48.7 billion yuan ($7.7 billion) listing in Shanghai on Wednesday, China’s biggest public share offering in a decade.

The company told the Hong Kong Stock Exchange it would press ahead with a plan to buy back up to 2.05 billion shares using existing cash and working capital.

China Mobile’s Hong Kong shares rose 1.91 per cent on Tuesday to close at HK$48 ($6.16), the highest since early November, before the news was announced.

In the stock exchange announcement, the company said the buyback would represent about 10 per cent of its issued shares in Hong Kong and the purchased shares would
be cancelled.

At the current Hong Kong price, the deal would be worth about $12.6 billion, but would rise if the stock gained ground during the buyback period.

The world’s largest mobile network operator by subscribers, China Mobile sold 845.7 million shares at 57.58 yuan ($9.06) each in Shanghai, the company said in an exchange filing on Tuesday, announcing the
debut date.

At Tuesday’s close, the company’s Hong Kong-listed shares traded at a 32 per cent discount to the stock’s Shanghai offering price.