26 March 2019

WH Group said to seek up to US$4.2 bln in Hong Kong IPO

Chinese pork processor WH Group, formerly known as Shuanghui International Holdings, plans to seek up to US$4.2 billion in its Hong Kong initial public offering, the Wall Street Journal reported Wednesday, citing people familiar with the matter.

The company, which acquired US-based Smithfield Foods last year, is planning to sell around 2.9 billion new shares, or 20 percent of the firm, in the range of HK$8.0-11.25 a share, the report said. The deal implies a price mutiple of 15 to 20.8 times forecast earnings, it said.

The price-to-earnings range translates to a valuation of US$15.3-21.2 billion for the Chinese company, the paper said, noting that international meat companies such as Tyson Foods and Hormel Foods of the US are trading at an average of 17.4 times forecast earnings.

Shanghai-based private-equity firm CDH Investments is the single largest shareholder in WH Group with a 38.1 percent stake, while WH’s management holds 42.6 percent, according to the report. Other shareholders in the pork producer are said to include Goldman Sachs Group’s private-equity arm and Singapore state investment firm Temasek Holdings.

– Contact HKE at [email protected]


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