Third time lucky. So hopes the slimmed down syndicate of banks (two, down from 29) that is listing pork producer WH Group. The Hong Kong market code of 288, at least, augurs well: in China, eight is a number of good fortune.
The omens are better on the structure of the deal, too. The new pricing, at HK$6.20, implies a 2014 earnings multiple of 11.5 times. This compares with 15 times at the top of the previous range. To prevent indigestion, the deal size has also been kept small – only around US$2bn (with an option of pushing to $2.3bn if demand warrants).
Private equity investors including CDH, Temasek and Goldman Sachs will not be selling down (only new shares are being sold). Further, Chinese firm CDH, which owns around one-third of the company before the issue, cannot sell for one year. Secondary sellers’ enthusiasm to exit scuppered the listing last time around, so this is good for getting the deal away – while suggesting that some owners will be poised to sell should the stock perform well.