Sun Art raises $1.1b in Hong Kong IPO

Sovereign wealth fund the Government of Singapore Investment Corp. (GIC) and Malaysia's state-run Khazanah were among the cornerstone investors in the offering, each taking $40 million worth of shares. General Atlantic and Hillhouse Capital Management invested $70 million apiece, while Tiger Global Management, Owl Creek Asset Management, Bain affiliate Arisaig Partners and Carmignac Gestion each committed $40 million.

Of listings in Hong Kong so far this year that have brought in more than $1 billion, Sun Art is only the second - after MGM China - to price at the top of expectations, Reuters reported. A number of offerings have been delayed or cancelled due to poor market conditions.

Sun Art sold 1.14 billion shares at HK$7.20 each. The offering values the company at 31.5x 2011 earnings and 24.1x 2012 earnings, slightly lower than rival supermarket operator China Resources Enterprise. UBS, Citigroup and HSBC were joint global coordinators for the deal, with BNP Paribas, China International Capital Corp, Goldman Sachs and Morgan Stanley also serving as underwriters.

Sun Art's popularity has been put down to general investor interest in the China consumer story. The company, a joint venture between Taiwan's Ruentex Group and French retailer Groupe Auchan, operates 197 hypermarkets across China under the Auchan and RT-Mart brands. It posted a net profit of RMB1.61 billion ($249 million) in 2010 on the back of sales worth RMB56.17 billion ($8.7 billion).

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• Topics
• Greater China
• Consumer
• Investments
• GIC Private
• General Atlantic
• Tiger Global Management
• Bain Capital Asia
• Morgan Stanley
• Goldman Sachs
• CICC