Shuanghui could soon salve Hong Kong bourse's wounds with its IPO
Share sale marketed at a lower valuation as Sino-US firm faces weakness of IPO market
Still licking its wounds from the loss of Alibaba's planned US$15 billion initial public offering, the Hong Kong stock exchange may find some consolation in the imminent listing of Shuanghui International, likely to be the city's biggest this year.
The mainland's largest meat processor, best known for its branded ham and sausage products, was scheduled to apply on Thursday for a listing in the city, three people familiar with its plans said.
If successful, Shuanghui, which will be listed under the new name of WH Group, aims to raise about US$6 billion on the Hong Kong exchange, the world's No2 destination for flotations after New York by capital raised last year.
WH Group is a holding company for all of Shuanghui's assets, including Smithfield Foods, acquired last year, and Shenzhen-listed Henan Shuanghui Investment & Development.
"It's of course a very big deal for the Hong Kong market, especially now that Alibaba is going to New York. If Shuanghui can do well, it will also give market sentiment in Hong Kong a strong boost," said a banker, who declined to be named.
After its listing hearing on Thursday, the company planned to launch its roadshow early next month and get listed on the main board by the end of April or in early May, the people familiar with the plan said.
Shuanghui's existing shareholders included CDH Investments, Goldman Sachs, New Horizon Capital and Temasek, the sources said.
CDH, one of the mainland's biggest private equity firms, still held 30 per cent of the company and planned to sell part of its existing "old shares", as distinct from the "new shares" Shuanghui planned to issue through the Hong Kong listing, they said.
Goldman Sachs has been cashing out of Shuanghui gradually in the past few years but still holds a minority stake. New Horizon Capital, a private equity fund co-founded by Winston Wen Yunsong, the son of former premier Wen Jiabao, and Singapore state investment firm Temasek are also minority shareholders.
Shuanghui's listing plan comes about six months after its landmark US$4.7 billion acquisition of Smithfield Foods, the biggest pork producer in the United States, which vaults the Henan-based firm into the top ranks of firms involved in the processing of meat and meat products.
The firm was initially scheduled to submit an A1 form, the official application for a Hong Kong listing, to the stock exchange in mid-January but decided to delay the application, partly because of the weak market sentiment at the time.
After Alibaba, the mainland's No1 e-commerce firm, decided to list in New York instead, Shuanghui has become Hong Kong's best hope to maintain its global ranking for flotations.