Ant Financial shares are being offered privately at levels which value the Chinese financial giant at $200 billion, two people with knowledge of the discussions said, lifting it up the ranks of the most valuable unlisted companies.
Alibaba affiliate Ant, which had an implied valuation of $150 billion during a 2018 fundraising, is preparing to step up plans for eventually going public in Hong Kong and mainland China, three other sources told Reuters.
Speculation has grown that Ant, the world's largest so-called "unicorn" -- a newly-formed unlisted tech firm valued at $1 billion or more -- is working towards an IPO this year.
Its advisers have recently approached potential buyers of the unlisted shares, the first two people said, as Ant seeks to tidy up its shareholder base ahead of any listing.
An Ant Financial spokesman said the company does not have a plan or timetable for an initial public offering (IPO).
Small holdings of Ant shares were traded in the secondary market at a $200 billion valuation late last year, another person familiar with the situation said. All of the people declined to comment due to confidentiality restrictions.
Investors worldwide are scrutinising valuations for "unicorns" more closely after last year's collapse in value of the once-hyped office space provider WeWork.
Some Ant investors packaged their shares into wealth management products so may not technically still hold them all, potentially complicating regulatory approval for an IPO.
Some executives are also selling some of their shares which are held via limited partnership schemes controlled by Alibaba founder Jack Ma, one of the first two sources said.
Under listing rules for domestic IPOs, the controlling shareholder or the actual controller of a company is subject to a three-year lock-up period.
Hangzhou-based Ant runs Alibaba's payment business Alipay and offers savings and credit products to Alipay users. Last year Alibaba switched its rights to 37.5% of Ant's pre-tax profits for a one-third shareholding.
Alibaba says Alipay and its local e-wallet partners have about 1.2 billion annual active users, of which 900 million were in China.
In the first nine months of 2019, Ant paid Alibaba 4.35 billion yuan ($634 million) in royalty fees and software service fees, regulatory filings show. Based on Alibaba's profit sharing arrangement with Ant prior to the swap, Ant's pre-tax profit for those months would be roughly 11.6 billion yuan.
Ant has quietly brought back together many of its corporate finance team, some of whom had moved to other roles in recent years. The moves are seen as a sign it wants to progress with preparations for a float, two people close to the company said.
And during a recent meeting with the China Securities Regulatory Commission (CSRC), China's market regulator, Ant discussed its IPO prospects along with other matters, two people with knowledge of the matter said.
But any plans are still extremely fluid, seven sources with knowledge of the process said.
China has essentially blocked quasi-financial companies from going public as part of a broader crackdown on financial risks for the past three years - a rule that also applies to Ant, according to a source with direct knowledge of the matter.
Ant had not yet made progress in getting approval from the CSRC for an IPO, the source added.
The CSRC did not respond to a request for comment.
Ant, which has applied for a Singapore digital banking licence, has been expanding its payment business internationally and investing in similar businesses in Southeast Asia and Europe.