Shuanghui International

JPMorgan, Credit Suisse among 10 banks to join Shuanghui IPO syndicate

PUBLISHED : Monday, 27 January, 2014, 2:29pm
UPDATED : Monday, 27 January, 2014, 2:44pm

Shuanghui International, China’s biggest pork producer which acquired Smithfield Foods for US$4.7 billion last year, has added another 10 underwriting banks to the syndicate for its ongoing US$5 billion Hong Kong initial public offering, according to people familiar with the deal said.

In a bid to expedite the planned share sale, Shuanghui International, which will be listed under the name of WH Group, a holding company created for the public offering that carries assets including Smithfield Foods and Shenzhen-listed Henan Shuanghui Investment & Development, has hired JPMorgan and Credit Suisse to join the syndicate team, bringing in a total of 16 joint bookrunners so far.

It is expected to add more banks to the Shuanghui IPO given that the size of the offering is unusually large, said bankers who have been working on the transaction since last year and who asked not to be named. The deal may come as early as the second quarter, they added.

“A few newly joined banks will take up the role of being global coordinator, a prominent position in the deal,” said a banker with direct knowledge of the situation.

Bankers in Hong Kong are putting much emphasis on the Shuanghui offering which could be one of the largest deals of this year and investors are eager to make a bet on consumer stocks at the expense of banking stocks amid worries over asset quality.

Shuanghui’s expanded syndicate team comes after the Henan-based company received the listing approval from the Hong Kong stock exchange last week, highlighting its desire to raise fresh capital to reduce its sizable outstanding loans from last year’s takeover of Smithfield, the world’s largest hog farmer and pork processor.

The mainland firm, controlled by Wan Long, one of the mainland’s richest men, borrowed a US$4 billion syndicate loan from a consortium of banks including Morgan Stanley and Bank of China.

Taking Smithfield’s exiting debt into account, the Shuanghui’s acquisition values the US firm at US$7.1 billion, according to Dealogic.

The roles and fees the additional banks would receive depend on their lining up of big investors before official marketing begins, the sources added.

The float underscores China's rise to the world's second biggest economy as mainland tycoons scour the world for acquisitions to expand their business.

The six investment banks hired for the listing include two major mainland securities houses - China Citic Securities and BOC International - and four large foreign banks - Goldman Sachs, UBS, Morgan Stanley and Standard Chartered.