China Kindle Store Rival Said to Seek Banks for $500 Million IPO

  • Tencent’s China Reading unit plans Hong Kong listing this year
  • Online literature platform has more than 600 million users

China Reading Ltd., the online literature unit of internet giant Tencent Holdings Ltd., has asked investment banks to pitch for a role arranging a Hong Kong initial public offering that could raise about $500 million, people with knowledge of the matter said.

The company aims to sell shares as early as this year, said the people, who asked not to be identified because the information is private. China Reading, which sells electronic books similar to Inc.’s Kindle Store, has more than 600 million users, according to its website.

An offering would follow Meitu Inc.’s $629 million IPO in December, the biggest first-time share sale in the city by a technology company since 2007, data compiled by Bloomberg show. Meitu, whose shares have risen 7.8 percent since then, was considered a test case for technology companies seeking to list in Hong Kong.

China Reading was created through the merger of Tencent’s online literature business with Carlyle Group LP-backed Cloudary Corp. The company was valued at about $2 billion in 2014, a person with knowledge of the matter said at the time. It has about 4 million contributors and hosts 10 million novels, its website shows. 

Canny Lo, a spokeswoman for Tencent, didn’t respond to an e-mail and text message seeking comment. IFR reported the IPO plans earlier Monday, citing unidentified people.

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