Graff will begin meeting investors this week and take orders at the end of the month, according to a term sheet obtained by Bloomberg News. The shares are expected to price on May 31, the sale document shows.
A listing in Hong Kong, where Chinese consumers take advantage of lower tax rates than in the country’s mainland and splurge on luxury goods, will have Graff following in the footsteps of global consumer companies such as Prada SpA. (1913) Retail sales in Hong Kong rose 17 percent in March after gaining every month since August 2009.
Graff may seek as much as $1 billion in the share sale, people with knowledge of the company’s plans have said. At that size the IPO will be the largest in Hong Kong since PCCW Ltd., the city’s biggest phone carrier, raised $1.2 billion in a sale of its telecommunication business last November.
The sale document didn’t include any details on the IPO’s potential size.
Prada, the Italian fashion house, which raised about $2.1 billion in Hong Kong’s largest IPO in the past year, ended last week up 33 percent since the sale, according to data compiled by Bloomberg. Shares of 83 companies that conducted offerings in Hong Kong in the last year are up an average of 5.5 percent from their IPO price, the data show.
Funds from Graff’s IPO will be used to pay down debt and for other general corporate purposes, according to the term sheet. Credit Suisse Group AG, Deutsche Bank AG, Goldman Sachs Group Inc. and Morgan Stanley are managing the planned offering, people with knowledge of the matter said last week.
Graff runs a store in the Peninsula Hotel in Hong Kong. Founder and London jewelry dealer Laurence Graff bought a diamond in a 2010 sale for a record auction price of 45.4 million Swiss francs ($50 million). Graff had also paid 16.4 million pounds ($27 million) for the 35.56-carat grayish-blue Wittelsbach Diamond at Christie’s International in London in December 2008, then the highest price for a gem at auction.
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