MeatPoultry.com and the Wall Street Journal report that WH Group Ltd. announced plans this week to raise up to $2.5 billion in a re-launched initial public offering. The Chinese company, which bought Smithfield Foods Inc. last year, cancelled plans to make its original $5 billion IPO April 29.
MeatPoultry.com reports that various factors contributed to the IPO's failure:
Lackluster demand from investors forced the company to slash its IPO to less than $2 billion from a high of nearly $5.3 billion. The spread of porcine epidemic diarrhea virus among US hog farms scuttled the company's plan to import cheap US pork as prices of pork sharply increased. Additionally, a $600 million pay-out to two WH Group executives raised investors' concerns about corporate governance.
WH Group’s new filing didn’t disclose an actual fundraising size, but sources have reported that the company plans to sell shares at 12 times the company’s forecast 2014 earnings to raise between $2 billion and $2.5 billion, WSJ reported. The company is planning to sell one-fifth of its enlarged share capital in the IPO and plans to begin taking orders in two weeks once it gets listing approval.