HONG KONG, July 30 WH Group Ltd, the world's
biggest pork producer, has raised the $2.1 billion it sought in
a Hong Kong initial public offering, a person with direct
knowledge of the deal said on Wednesday.
The IPO, which closed to the public on Tuesday, was the
Chinese company's second attempt this year to raise funds after
investors shunned an earlier offer that aimed to raise up to
$5.3 billion due to high valuations.
WH Group, which counts private equity firm CDH Investments,
Goldman Sachs and Singapore state investor Temasek
Holdings among its shareholders, offered 2.57 billion
new shares at a fixed price of HK$6.20 each.
The deal could grow by 385.1 million shares and total as
much as $2.36 billion if underwriters exercise an option to meet
additional demand for the IPO, according to the prospectus.
WH Group did not respond to Reuters emails seeking comment.
The source declined to be named as the deal remained
WH Group, which bought U.S. firm Smithfield Foods for $4.9
billion in 2013, initially planned to raise up to $5.3 billion
to pay down debt taken on for the acquisition.
But it was forced to pull the IPO in late April. In addition
to high valuations sought, investors were also were turned off
by mismanaged marketing after a record 29 banks were hired for
the offering and sky-high executive compensation that raised
corporate governance concerns.
For its second attempt, just two banks - BOC International
and Morgan Stanley - were hired as joint sponsors and joint
global coordinators of the IPO. The banks stand to earn a
combined $41 million, equivalent to a 1.5 percent underwriting
commission and an incentive fee of up to 0.5 percent, according
to the IPO prospectus.
(Reporting by Elzio Barreto; Editing by Denny Thomas and Miral