HONG KONG, Aug 5 (Reuters) - Shares in WH Group Ltd , the world’s biggest pork producer, are set to rise 9.7 percent in their Hong Kong trading debut on Tuesday as investors who weren’t able to buy into the initial public offering jostle for a piece of the deal.
The shares are indicated to open at HK$6.80, compared with their IPO price of HK$6.20, while the benchmark Hang Seng index was indicated to open up 0.3 percent.
The listing comes after WH Group, which is part owned by China private equity firm CDH Investments, Goldman Sachs and Temasek Holdings (Private) Ltd, raised about $2.1 billion in a rare fixed-priced IPO, it’s second attempt at an offering.
Investors had shunned an earlier deal seeking more than twice as much - put off put off by high valuations, sky-high executive compensation and mismanaged marketing after a record 29 banks were hired.
In its second attempt, the retail portion of deal generated red-hot demand, accounting for 55.22 times the shares on offer, the company said in a filing on Monday. The institutional tranche was “moderately over-subscribed”.
The funds will be used to pay down part of the debt WH Group took on to buy U.S. firm Smithfield Foods Inc for $4.9 billion in 2013. (Reporting by Elzio Barreto. Additional reporting by Denny Thomas; Editing by Edwina Gibbs)