Chinese pork giant WH Group, shareholders plan $5.3 billion IPO in HK

HONG KONG Wed Apr 9, 2014 9:04pm EDT

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HONG KONG (Reuters) - Chinese pork giant WH Group Ltd launched on Thursday a Hong Kong initial public offering of up to $5.3 billion, the second-biggest ever IPO by a food and beverage company.

WH Group and some of its shareholders are offering 3.65 billion shares in a range of HK$8.00 to HK$11.25 each, putting the total deal at up to HK$41.06 billion ($5.3 billion), according to a term sheet seen by Reuters.

That would make it the second-biggest ever food and beverage IPO after Kraft Food Inc's $8.7 billion listing in June 2001. It would also be the largest new listing in the Asia-Pacific since AIA Group Ltd (1299.HK) raised $20.5 billion in October 2010.

WH Group, the world's largest pork company, could increase the size of the IPO to $6.11 billion if underwriters exercise a greenshoe option to meet additional demand.

The group plans to use part of the proceeds to pay down debt it took as part of its $4.9 billion takeover of U.S.-based Smithfield Foods Inc last year, people familiar with the plans have said.

The deal would nearly double IPO volumes in Hong Kong since the beginning of the year to $12.1 billion and lift the city past New York as the world's biggest venue for new listings so far this year.

About 80 percent of the offering consists of new shares from WH Group, with the rest to be sold by existing shareholders looking to reduce their stakes.

Selling shareholders include a subsidiary of Goldman Sachs (GS.N), Singapore state investor Temasek Holdings TEM.UL and CDH Investments - one of China's biggest and oldest private equity firms.

Private equity firm New Horizons - founded by Winston Wen, son of China's former premier Wen Jiabao - will also be selling part of its stake, the term sheet showed.

Pricing for the IPO is slated for April 22, with the shares making their debut on the Hong Kong stock exchange on April 30. ($1 = 7.7531 Hong Kong Dollars)

(Reporting by Elzio Barreto; Editing by Ryan Woo)

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