COFCO PE unit to back Huishan Dairy IPO – report
The PE unit of Chinese food conglomerate COFCO will be among the cornerstone investors in milk producer China Huishan Dairy Holdings, which plans to list in Hong Kong in September.
According to The Wall Street Journal, Huishan Dairy plans to raise up to $1.3 billion by selling 3.79 billion shares at HKD2.28-2.67 apiece. That price range represents 14.5-17x its forecast 2014 earnings.
The price range represents a discount to other Chinese dairy firms listed in Hong Kong. China Modern Dairy trades at 17.7x estimated 2014 profit, while China Mengniu Dairy is trading at 21.7x forecast 2014 earnings.
Huishan will start taking orders from institutional investors this week. In a statement to the Shanghai Stock Exchange, dairy firm Inner Mongolia Yili Industrial Group said it will invest $50 million in the company. Besides COFCO, the other cornerstone investors include Norges Bank and Norway's central bank.
Deutsche Bank, Goldman Sachs, HSBC and UBS are handling the offering.
Chinese packed food and beverage producer Tenwow International is also looking to raise as much as HK$1.5 billion through a Hong Kong listing. The Carlyle Group, Milestone Partners and Orchid Asia will participate as cornerstone investors, injecting a combined of $92.3 million for an 11.4% stake in the company.
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