WH Group Said to Plan Cutting IPO Bookrunners to Two From 28Fox Hu and Zijing Wu
WH Group Ltd., which aborted a Hong Kong initial public offering in April after hiring a record 28 investment banks, plans to use just two bookrunners for its second attempt, said people with knowledge of the matter.
The Chinese owner of Smithfield Foods Inc. will work with BOC International Holdings Ltd. and Morgan Stanley on the $2.3 billion IPO, said the people, who asked not to be identified because the information is private. WH Group plans to start taking orders for shares next week, the people said.
In its previous attempt, WH Group used the biggest bank syndicate for any IPO in Hong Kong, exceeding the 21 bookrunners China Galaxy Securities Co. hired for its 2013 sale. Among 16 sales that raised more than $1 billion since the start of 2011, only HK Electric Investments used less than three joint bookrunners, according to data compiled by Bloomberg.
Chongqing Rural Commercial Bank Co. relied on just two advisers for its $1.7 billion IPO in December 2010.
WH Group said July 10 that it appointed Morgan Stanley and BOCI as joint sponsors for the IPO. Sponsors are the most senior banks on an offering, and are primarily responsible for information in deal prospectuses. The company in its last attempt used seven IPO sponsors and 21 additional bookrunners.
Daiwa Securities Group Inc. and Nomura Holdings Inc. will help WH Group sell shares in Japan, according to a filing today. The company plans to start trading around Aug. 5, the filing showed. Companies that go public in Hong Kong often hire Japanese banks for marketing shares set aside for investors in that country.
A Hong Kong-based external spokesman for WH Group declined to comment on the IPO plan. The lineup of advisers may change and WH Group could add additional bookrunners, the people said.
WH Group initially tried to raise as much as $5.3 billion. The company scrapped the sale even after cutting the size of the deal by about two-thirds, raising questions about the effectiveness of hiring large groups of banks for IPOs.