Blackstone's Bluestar goes out with HK market slide

According to the company statements, Bluestar Adisseo originally planned to offer just over 2.3 billion shares, in a pricing range between HK$3.5 ($0.45) and HK$5.25 ($0.68). The public offering was supposed to float earlier last week, however the plan was scrapped at the last minutes due to market volatility. Accordingly, an underwriting agreement relating to an international placing will not be entered into, noted a statement.

Henry Ong, Partner at Weil, Gotshal & Manges LLP shared his opinion on the current trend of withdrawing or postponing planned IPOs in Hong Kong. "Aside from the recent market jitters we see, the range of factors includes: worries about China's inflation [and the] property market, the cooling measures recently implemented [in the PRC] and that are likely to come, through to parts of Europe being admitted – or which may be admitted – to the intensive care unit."

The blue-chip Hang Seng Index was down 2.8% in the past week and has slid 7.8% from its high point on November 8th.

Ong said, "The market here has had a strong run, and there has been some correction, but it's not as if the stock market has fallen apart. The underlying US (and therefore global) economic uncertainties, the Eurozone's problems, combined with more recent concerns about China's inflation and cooling measures, were enough to  reduce some of the froth."

Bluestar Adisseo Nutrition Group, which commenced its operations in 1971, has built up its current position as a global market leader by enlarging its operations organically and through M&A.

In 2007, private equity giant Blackstone signed a strategic alliance with ChemChina, the PRC's largest chemical company. As the capital component of the alliance, the US firm took 20% of BlueStar, investing $600 million. BlueStar bought the French group Adisseo in 2006, by acquiring 100% of Belgian holding company Drakkar Holdings S.A., which operated a subsidiary called Aventis Animal Nutrition (ANN), and changed the company's name to create the entity that sought to list in Hong Kong. Back in 2002, ANN sold 75% of its business to European private equity firm CVC Capital Partners and made the Adisseo Group companies subsidiaries of Drakkar Holdings.

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• Topics
• Greater China
• Exits
• Consumer
• The Blackstone Group