WH Group to raise US$2.3b in new fixed-price IPO deal

Sino-US pork producer WH Group has launched its stalled initial public offering of shares in a fixed-price deal that will raise about US$2.3 billion.

The sale comes three months after the original offer collapsed because of a combination of factors including poor market conditions, a disclosure of massive payments to two company executives and conflicting messages to investors from a record 29 investment bank bookrunners.

"This is now a reconfigured deal that is coming to the market at an agreed price," a source with knowledge of the listing plan told the South China Morning Post. "Short of a sudden major drop in the market, this deal is going ahead."

The shares will be sold for HK$6.20 each and are expected to begin trading on August 5.

The offering values the firm at roughly 11.5 times estimated earnings for this year, compared with the 15 to 20 times earnings the original transaction targeted in April, when the management eyed a sale raising as much as US$6 billion.

The listing was eventually scrapped after being scaled back to US$1.9 billion.

David Lau, JP Morgan's head of China corporate finance, said issuers were being more realistic on valuations given that overall market conditions in Hong Kong remained choppy, despite the busiest first half for new share issuance in three years.