China's WH Group Ltd, the world's largest pork processor, is seeking to raise as much as $4.3 billion through the issuing of new shares in its upcoming Hong Kong initial public offering, people familiar with the matter said.
The size of the deal could grow to as much as $6 billion if WH Group's current owners including private equity firm CDH Group and others decide to sell their shares, the people said on Wednesday, declining to be identified because details of the offering have not been publicly disclosed.
At $6 billion, the IPO would be the Asia-Pacific region's biggest since insurer AIA Group Ltd raised $20.5 billion in 2010. The sale, the proceeds of which will be used to pay down debt that WH Group took to acquire Smithfield Foods Ltd last year, is set to be launched on Thursday.
WH Group plans to sell 2.923 billion new shares in an indicative range of HK$8.00-11.25 per share, valuing the primary portion of the IPO at up to HK$32.9 billion ($4.3 billion), the people said.
WH Group declined to comment on its IPO plans.
The number of secondary shares in the IPO, if any, will be determined after the company and its underwriters start taking orders from investors and have a better understanding of how demand is for the deal, according to one of the sources.
"This is not typical, but we have fairly volatile markets, so why not keep as many options as possible?" the source said.
At the top end of its range, the IPO would be the second biggest ever by a food company, behind Kraft Food Inc's $8.7 billion listing in June 2001.
WH Group intends to sell shares in a 2014 price-to-earnings multiple of 15-20.8 times, Thomson Reuters publication IFR said.
WH Group has hired a record 29 banks to underwrite the IPO, surpassing the previous record of 21 mandated for China Galaxy Securities Ltd's $1.1 billion IPO last year.
BOC International, Citic Securities International, DBS, Goldman Sachs, Morgan Stanley, Standard Chartered and UBS were hired as sponsors of the IPO.
Bank of America Merrill Lynch, Barclays, China International Capital Corp, Credit Suisse, Deutsche Bank, ICBC International, JPMorgan and Rabobank will also act as joint global coordinators, with another 13 banks hired as bookrunners. ($1 = 7.7550 Hong Kong Dollars)
