Date
20 October 2017
WH Group, the world's largest pork producer, is expected to raise US$2.3 billion from the share sale and have a market capitalization of US$11.7 billion. Photo: Bloomberg
WH Group, the world's largest pork producer, is expected to raise US$2.3 billion from the share sale and have a market capitalization of US$11.7 billion. Photo: Bloomberg

WH Group reboots Hong Kong IPO after cutting valuation

WH Group, the world’s largest pork producer, is set to list on the Hong Kong stock exchange on Aug. 5,  after lowering its share price to HK$6.20 each, far below its previous target of at least HK$8, the Financial Times reported on Tuesday, citing unidentified sources.

The new pricing values the company 11.5 times its forecast 2014 earnings, down from a minimum of 15 times in its previous initial public offering plan, the report said.

If the “greenshoe option” of selling extra shares is exercised, WH Group will raise US$2.3 billion from the share sale and have a market capitalization of US$11.7 billion.

The company is less than six months old, the product of Shuanghui International’s‘s acquisition of US-based Smithfield Foods for US$7 billion. The merger received regulatory approval only in September last year.

The IPO roadshow will kick off on Wednesday, with the Hong Kong public offering running until next Tuesday.

About 30 key investors, including sovereign wealth funds and long-only funds, have committed to buy shares, according to the newspaper.

The proceeds will be used to pay back about US$4 billion in loans used to fund the Smithfield takeover.

If completed as planned, WH Group will be the largest listing in Hong Kong this year, the report said.

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