After withdrawing its April initial public offering (IPO) which was planned to raise US$5 billion because of adverse market conditions, WH Group (formerly Shuanghui) is re-launching the offering on Wednesday July 23, with a new, more modest goal of raising US$2.05 billion. The company plans to sell 2.56 billion new shares at a fixed price of 6.20 Hong Kong dollars (US$0.80 cents) each. This price equals 11.5 times the company’s expected 2014 earnings, compared to the price set in April which was 15-20.8 times earnings. If demand supports it, the company has the option to sell additional shares which would bring the money raised to US$2.36 million. A shadow book building process has indicated that there is ample interest from institutional investors such as sovereign wealth funds and pension funds to complete the deal. This second attempt at an offering is being made as stock markets in Asia-Pacific are doing well, and WH Group is scheduled to list on the Hong Kong exchange on August 5th.
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