August 1, 2014
WH Group succeeds in raising US$2.05 billion in Hong Kong IPO
Chinese pork producer WH Group Ltd. has raised US$2.05 billion in its second attempt at an initial public offering in Hong Kong, Wall Street Journal reports.
The company which bought United States-based Smithfield Foods Inc. last year, sold 2.57 billion shares at a fixed price of 6.20 Hong Kong dollars, or 80 US cents.
The offer was smaller than the US$5 billion IPO the company withdrew in April. The latest IPO price represents 11.5 times forward 2014 earnings, compared to the 15 to 20.8 times indicated by the price range set in the original attempt.
The new pricing attracted strong interest from retail investors. The company set the retail tranche at 5% of the offering, but subscriptions exceeded the shares on offer by 55 times, prompting the company to raise the allotment for retail investors to 10%. Accordingly, the institutional tranche was expected to account for 95% of the deal but will now account for 90%. It received subscriptions for about three times the amount on offer.
The WH Group's IPO is the second-largest this year in Hong Kong, after a US$3.11 billion IPO by HK Electric Investments Ltd.
