WH Group Said to Seek at Least $2.3 Billion in Revived IPO
WH Group Ltd., the world’s biggest pork producer, plans to seek at least $2.3 billion in a revived initial public offering in Hong Kong, said people with knowledge of the matter.
WH Group will seek a valuation of more than 12 times its estimated 2014 profit, the people said, asking not to be identified because the information is private. It aims to start trading in early August, they said.
The Chinese owner of Smithfield Foods Inc. is planning to sell shares in Hong Kong after seeking as much as $5.3 billion in a failed attempt earlier this year. Since then it has cut the number of joint sponsors on the deal to two from seven, according to exchange filings.
Morgan Stanley and BOC International Holdings Ltd. are joint sponsors of the revived IPO, according to an exchange filing today. The company is considering selling new shares that account for about 20 percent of its enlarged capital, according to the people. It hasn’t made a final decision yet on the number of shares, they said.
WH Group’s first-quarter profit jumped to $407 million from $125 million in the same period of 2013, today’s filing shows. Revenue for the three months ended March increased to $5.05 billion from $1.55 billion a year earlier, according to the filing.
Hong Kong initial public offerings have raised $11.5 billion since the start of the year, up from $5.8 billion the same period in 2013, according to data compiled by Bloomberg. The city’s benchmark Hang Seng Index has risen 3.5 percent since WH Group said April 29 it was canceling its $1.9 billion IPO.
Chinese drugmaker Luye Pharma Group Ltd. (2186) and its owners raised $764 million earlier this month, after pricing a Hong Kong initial public offering at the top end of a marketed range, data compiled by Bloomberg show. Shares of Luye Pharma, which is backed by Singapore’s sovereign wealth fund, rose 13 percent on their July 9 trading debut.
A Hong Kong-based external spokesman for WH Group declined to comment on the IPO plan. The Wall Street Journal reported earlier today the company plans to raise more than $2 billion, citing unidentified people.
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