Shuanghui Said to Hire Six Banks for $6 Billion H.K. IPOFox Hu
Shuanghui International Holdings Ltd., the Chinese company that bought the world’s biggest pork supplier this year, plans to seek as much as $6 billion in an initial public offering in Hong Kong, said two people with knowledge of the matter.
BOC International Holdings Ltd., Citic Securities Co., Goldman Sachs Group Inc., Morgan Stanley, Standard Chartered Plc and UBS AG are working on the share sale, said the people, who asked not to be identified because the information is private. The offering may start next year, they said.
The sale may help revive the IPO market in Hong Kong, where proceeds are rebounding from a nine-year low in 2012. Shuanghui joins other companies, including Power Assets Holdings Ltd.’s Hong Kong unit and China Cinda Asset Management Co., seeking to raise money in the city through IPOs worth more than $1 billion as the Chinese economy shows signs of recovery.
“This window for new issuances is open but investors are selective and price sensitive,” said David Suen, head of equity capital markets for Asia outside Japan at JPMorgan Chase & Co. “The macroeconomic signals from China and the policy direction from the Communist Party Congress meeting in China later this week would have an impact on how the market is going to unfold for the rest of the year.”
The Communist Party’s four-day conclave starting Nov. 9 will consider reforms aimed at maintaining China’s economic growth. Indexes of manufacturing and services in October show the world’s second-largest economy is picking up, and Premier Li Keqiang said last month that China needs 7.2 percent expansion to keep unemployment stable.
U.S. regulators and Smithfield Foods Inc. shareholders approved Shuanghui’s $4.7 billion takeover in September, sealing the biggest Chinese purchase of an American company. The acquisition underscores increased demand for meat in China, where rising incomes are spurring sales of pricier foods.
Shuanghui’s investors include CDH Investments Fund Management Co., Goldman Sachs and New Horizon Capital, the Chinese private equity firm co-founded by the son of China’s last premier, according to its website. Hong Kong-based Kerry Group Ltd., controlled by billionaire Robert Kuok, and Singapore’s Temasek Holdings Pte. are also shareholders, the website shows.
Companies have raised $11.3 billion through Hong Kong IPOs this year, more than triple the value for the same period last year, according to data compiled by Bloomberg.
Power Assets, controlled by Asia’s richest man Li Ka-shing, plans to raise as much as $5 billion selling units in its Hong Kong electricity arm, people with knowledge of the matter said Sept. 27. Cinda, one of four funds created in 1999 to buy bad debts from China’s banks, will seek as much as $3 billion this year, people with knowledge of the matter said earlier.
Alibaba Group Holding Ltd., China’s biggest e-commerce company, is considering a U.S. listing after talks with the Hong Kong stock exchange about a proposed governance structure broke down. An Alibaba IPO could raise about HK$100 billion ($12.9 billion), Ernst & Young LLP said June 28. The Hong Kong exchange said Oct. 30 it may start a public consultation on different shareholding structures, which may pave the way for Alibaba to go public there.
Shuanghui’s media relations department declined to comment when contacted by phone. Reuters reported on the IPO plan earlier today, citing unidentified people.
Huishang Bank Corp. and some of its shareholders raised $1.2 billion in Hong Kong’s biggest banking IPO in almost three years, people familiar with the matter said today. Bank of Chongqing Co. fell 0.2 percent on its trading debut today after a $547 million IPO.