Pou Sheng plans to raise up to $396 mln HK IPO- source

(For an expanded IPO diary, please click <HK/IPOMENU>)

HONG KONG, May 16 (Reuters) - Chinese sportswear retailer Pou Sheng International (Holdings) Ltd plans to raise as much as $396 million in a Hong Kong initial public offering, a source close to the deal said on Friday.

Pou Sheng, which is a spinoff from the world's top sports shoes maker Yue Yuen Industrial (Holdings) Ltd (0551.HK: Quote, Profile, Research, Stock Buzz), is selling 823.4 million shares at HK$2.93-HK$3.75 each, representing a price to earnings multiple of 17.1 to 21.7 times based on 2008 earnings forecast by sponsors, the source said.

Pou Sheng which operates in mainland China, Hong Kong and Taiwan, under licensed brands such as Nike (NKE.N: Quote, Profile, Research, Stock Buzz), Adidas (ADSG.DE: Quote, Profile, Research, Stock Buzz), Li Ning, Reebok, Kappa.

Morgan Stanley (MS.N: Quote, Profile, Research, Stock Buzz) and Merrill Lynch (MER.N: Quote, Profile, Research, Stock Buzz) are sponsoring the deal. (US$1=HK$7.8) (Reporting by Kennix Chim; Editing by Louise Heavens)