By Scott Murdoch

HONG KONG (Reuters) – Chinese online gaming firm Netease raised at least $2.7 billion in a Hong Kong secondary offering after pricing its shares at HK$123 ($15.87) each, according to two sources with direct knowledge of the matter.

The company had planned to sell 171.48 million shares, according to an earlier term sheet, and has the option of selling another 25.72 million shares, under a so-called ‘greenshoe’ option.

The Hong Kong price is equivalent to $396.70 for Netease’s U.S.-listed shares which is a 2% discount to the stock’s last closing price of $405.01 on Thursday.

Under the terms of the deal, one American depository receipt (ADR) is worth 25 of the company’s Hong Kong shares.

In its earlier regulatory filings, Netease said it planned to use the money raised in its Hong Kong listing to fund its international expansion plans.

Netease’s deal is expected to be one of several large secondary deals in Hong Kong this year, after the U.S. administration questioned whether Chinese companies should be able to list in New York as tensions with Beijing rise.

Chinese e-commerce company is due to launch its Hong Kong listing as early as Friday, according to sources with knowledge of the matter, to sell up to 5% of its stock to raise at least $3 billion.

Shares of Netease will list on June 11.

Netease did not immediately respond to a request for comment.

($1 = 7.7501 Hong Kong dollars)

(Additional reporting Pei Li; Editing by Muralikumar Anantharaman and Jacqueline Wong)