* Revised IPO of up to $1.9 bln pulled; no new dates
* WH Group's decision comes after slashing planned offer
(Adds IPO details, comments, underwriters)
By Elzio Barreto and Daniel Stanton
HONG KONG, April 29 China's WH Group Ltd, the
world's biggest pork company, has postponed its planned Hong
Kong initial public offering (IPO) due to weak demand for the
deal even after it cut the offer size by two-thirds, sources
said on Tuesday.
The decision is a setback in the company's effort to cut the
large debt it took on to seal the $4.9 billion acquisition of
Smithfield Foods Inc last year.
It also caps a tumultuous four weeks for WH Group, during
which the company and its bankers faced mounting questions from
investors skeptical of paying top valuation in the IPO without
clear signs of cost savings from the combination with
Smithfield, separate sources have said.
WH Group declined to comment on the IPO plans when contacted
The company last week slashed the offer size by two-thirds.
This was a result, fund managers and bankers said, of WH Group
and its owners seeking too high a price, hiring too many
underwriters - a record 29 - as well as negative publicity over
some sky-high executive compensation.
It also had bad luck as sentiment towards new listings slid
The company has postponed the deal without setting a new
timetable, effectively pulling the IPO in its current shape,
added the sources who declined to be named as they were not
authorized to speak publicly on the matter.
"If market conditions improve, the deal might be revived at
some point, but it's hard to set a date at this point in time,"
one of the sources said.
WH Group, whose products include Smithfield ham and Farmland
bacon in the United States, offered 1.3 billion new shares in a
revised deal valued at up to HK$14.61 billion ($1.9 billion).
It had marketed the IPO in an indicative range of HK$8.00 to
HK$11.25 per share.
The IPO was cut last week from the original size of up to
$5.3 billion which involved WH Group and a group of shareholders
including private equity firms CDH Investments and New Horizon,
Goldman Sachs and Singapore state investor Temasek
Holdings selling shares.
WH Group, the world's No.1 pork firm by output, hired a
record number of underwriters for the deal, surpassing the
previous all-time high of 21 mandated for China Galaxy
Securities Ltd's $1.1 billion IPO last year.
BOC International, Citic Securities International, DBS,
Goldman Sachs, Morgan Stanley, Standard Chartered and UBS were
hired as sponsors of the share offer.
Bank of America Merrill Lynch, Barclays, China International
Capital Corp (CICC), Credit Suisse, Deutsche Bank, ICBC
International, JPMorgan and Rabobank also acted as joint global
coordinators, with another 13 banks hired as bookrunners.
($1 = 7.7532 Hong Kong Dollars)
(Reporting by Elzio Barreto and Daniel Stanton of IFR; Editing
by Denny Thomas and Pravin Char)