PE-backed WH Group scraps HK IPO plan

The decision comes after the company slashed the size of the offering by more than a half last week. The downsizing also prompted the private equity investors, including CDH Investments, Goldman Sachs, Temasek Holdings and New Horizon Capital, to withdraw their plans to sell shares.

The pork producer, formerly known as Shuanghui International Holdings, rolled out an option to sell 20% more shares on top of 3.66 billion shares on its IPO plan in April, paving a way for PE investors to partially exit their interests.

Initial projections of a $5.3 billion offering - valuing the company at $21 billion - looked set to turn WH Group into the second-largest IPO by a food and beverage firm globally after Kraft Foods.

"In light of deteriorating market conditions and recent excessive market volatility, the company, having consulted the joint sponsors, has decided that the global offering will not proceed at this time," WH Group said in a statement. It will return subscribers' money.

CDH Investments is the single largest shareholder in WH Group with a 38.1% stake, while the firm's management holds 42.6%. CDH first invested $250 million in Shuanghui alongside Goldman Sachs in 2006.

Temasek and New Horizon invested in the company in 2009.

WH Group bought Smithfield in September last year for $4.7 billion. It was the largest-ever buyout by a Chinese company in the US. It is understood that the capital raised from the offering would have been used to pay down debt tied to the Smithfield acquisition.

Shanghui borrowed around $4 billion to buy Smithfield and took on $3 billion of the US firm's debt.

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• Topics
• Greater China
• Exits
• China
• Hong Kong (China)
• IPO
• Exit
• Consumer
• CDH Investments Management
• Goldman Sachs
• Temasek Holdings
• New Horizon Capital