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Fosun Pharma Raises $512 Million in Offer at Bottom of Range

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Oct. 24 (Bloomberg) -- Shanghai Fosun Pharmaceutical Group Co., a Chinese maker and distributor of drugs, raised $512 million in a stock sale in Hong Kong after selling shares at the low end of a marketed range.

Fosun Pharma, listed in Shanghai, sold about 336.1 million shares at HK$11.80 apiece, according to a term sheet obtained by Bloomberg News. The shares were originally offered at as much as HK$13.68 each, according to Fosun Pharma’s share-sale prospectus.

Companies are struggling to raise money in Hong Kong as China’s economy cools, with seven of this year’s 10 largest first-time offerings in the city pricing at the low end of marketed ranges, data compiled by Bloomberg show. Fosun Pharma’s pricing suggests the 15 percent gain in Hong Kong’s benchmark stock index in the past three months has failed to stoke demand for new equity.

Fosun Pharma’s offer price is at about an 8.5 percent discount to its close of 10.39 yuan in Shanghai yesterday. The shares rose 1.4 percent to 10.53 yuan today. Fosun Pharma plans to use the share-sale proceeds to fund acquisitions and research and to repay debt, according to the prospectus.

The Hong Kong sale price would value the company at 12 times its estimated 2013 earnings, according to people with knowledge of the matter. Shanghai Pharmaceuticals Holding Co., the second-biggest drug distributor in China, trades at 13.9 times the average estimate for next year’s profit among analysts surveyed by Bloomberg.

China International Capital Corp., Deutsche Bank AG, JPMorgan Chase & Co. and UBS AG managed the sale, terms show.

To contact the reporter on this story: Fox Hu in Hong Kong at fhu7@bloomberg.net

To contact the editor responsible for this story: Philip Lagerkranser at lagerkranser@bloomberg.net

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