WH Group sets terms for HK IPO to raise $2b

The company - known as Shuanghui International until it acquired US-based Smithfield Foods in 2013 and rebranded as WH Group - initially sought to raise HK$41 billion in April. However, a weak response from investors led to the offering first being downsized and then scrapped completely.

The revised IPO will see WH Group sell 2.56 billion shares at HK$6.20 apiece, with an over-allotment option that could see underwriters sell up to 385.1 million additional shares, taking the size of the offering to $2.36 billion. The pricing values the company at 11.5x projected earnings for 2014 compared to 15x for the previous IPO.

None of the existing shareholders will sell shares in the offering. CDH holds a 38.1% interest in WH Group, having first invested $250 million in the company alongside Goldman in 2006. The latter's stake has since been pared back to 5.18%, while New Horizon Capital owns 4.15%, Temasek Holdings has 2.76% and Kerry Holdings 7.4%.

WH Group claims to have the number one market shares across China, the US and several key markets in Europe. With Shuanghui Development and Smithfield - which was acquired in September for $4.7 billion - the group owns Asia's largest animal protein company and US's largest pork firm, respectively. It also has a 37% stake in Campofrio, one of the largest European packaged meat companies.

Two banks - Morgan Stanley and BOC International, a unit of Bank of China - will lead the offering this time. Daiwa Securities Group and Nomura Holdings will focus on selling shares to Japanese investors.

WH Group is scheduled to list on Hong Kong's stock exchange on August 5.

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• Topics
• Consumer
• Industrials
• Greater China
• IPO
• Agriculture
• Consumer
• CDH Investments Management
• New Horizon Capital
• Temasek Holdings
• China