WH Group flop shows pitfalls of crowded IPOs 30 Apr 2014 The Chinese pork producer hired a record 29 banks but still failed to sell its $1.3 bln listing to investors. That undermines the received wisdom that more advisers mean less risk for issuers. For banks, it’s a reminder they can share embarrassment as well as league table credit.
WH Group’s pulled pork IPO is least bad outcome 29 Apr 2014 The Chinese producer was so greedy even 29 banks couldn’t sell its $1.3 bln Hong Kong offering. Pushing ahead would have left private equity backers with a big stock overhang. A delay gives WH Group time to integrate its big U.S. deal, although it means carrying debt for longer.
Dairy holds key to $1.2 bln Goodman takeover 28 Apr 2014 The troubled Australian food group has rejected a bid from Singapore’s Wilmar and Hong Kong’s First Pacific that values it at 8 times this year’s EBITDA. To convince investors it is worth more on its own, Goodman quickly needs to find a buyer or partner for its dairy business.
Asia push to in-house M&A forces advisers to adapt 17 Apr 2014 From China’s CITIC to Singapore’s Temasek, Asian acquirers are increasingly relying on in-house talent to get deals done. The loss of potential deal flow in an already tough market means big banks will have to work harder to prove their worth.
CITIC’s $37 bln merger hints at SOE reform task 16 Apr 2014 The union of the Chinese giant with its Hong Kong-listed subsidiary offers rare visibility into China’s sprawling state conglomerates. CITIC Pacific shareholders get mostly listed assets at a discount – and if all goes well, a potentially profitable ringside seat in the cleanup.
Hong Kong needs to defend shareholder democracy 16 Apr 2014 The stock exchange is poised to launch a debate on shareholder voting rights after Alibaba cancelled its listing in the former colony. Dumping “one share, one vote” won’t necessarily attract many new IPOs. But it would undermine Hong Kong’s already shaky corporate governance.
China’s big pork IPO could be fat or lean 10 Apr 2014 Pig processor WH Group is hoping to raise as much as $7.1 billion in Hong Kong. But the range is huge: the maximum share price is 41 percent above the minimum. It suggests the group’s private equity backers, its 29 banks, and public investors may struggle to agree on a valuation.
Alibaba shopping spree needs better explanation 3 Apr 2014 The Chinese e-commerce group has spent $3.8 bln on acquisitions since 2013, but the strategic logic remains hazy. Other internet giants are making similar deals, and the land grab may excite prospective investors. Even so, Alibaba will eventually have to justify its purchases.
China stock market opening is opposite of Big Bang 3 Apr 2014 Investors are getting excited about mainland shareholders being allowed to buy Hong Kong stocks. But as with any loosening of China’s capital controls, progress will be gradual. Though Chinese cash will increasingly leak onto global markets, any breakthrough remains some way off.
Shrinking margins take bling off Prada valuation 3 Apr 2014 Shares in the Italian fashion house fell 8 percent after costs rose faster than revenue in 2013. Weak sales from its Miu Miu brand added to the gloom. The selloff scuffs Prada’s premium rating relative to rival luxury brands. But there may be further markdowns to come.
OCBC’s Chinese ambition comes with hefty price tag 1 Apr 2014 The Singapore bank is buying Hong Kong’s Wing Hang for $5 bln. Paying two times book value for a second-tier lender looks dicey when China is slowing and the Fed’s tapering is threatening to push up deposit costs. For OCBC investors, short-term pain may outweigh long-term gain.
CITIC’s $41 bln deal can avoid a stock market test 1 Apr 2014 The Chinese conglomerate is injecting itself into its Hong Kong-traded subsidiary. To maintain a minimum free float, CITIC Pacific will need to raise cash or partly pay in convertible shares. Though the latter option is easiest, it also undermines the point of a public listing.
CITIC’s $41 bln mega-merger needs fancy footwork 27 Mar 2014 The Chinese state conglomerate wants to reverse into its Hong Kong-listed subsidiary, for a premium. There’s something for both sides, but it will require some creativity to ensure the deal looks good financially for the government as well as public shareholders.
Li Ka-shing de-risks with $6 bln Temasek sale 21 Mar 2014 The Hong Kong tycoon has ditched plans to list his retail division by selling 25 pct to the Singaporean investor. The deal crystallizes a decent valuation for Li without the execution risk of an IPO. For Temasek, it’s a bold bet on both consumer growth and private investments.
Li & Fung revival depends on more than split 21 Mar 2014 The Hong Kong trading group’s shares jumped 17 pct on plans to separate its branding arm from its sourcing business. Although two listed units may be simpler, it’s not obvious how the manoeuvre creates value. A sustained re-rating requires both bits to rediscover organic growth.
Hong Kong market’s other problem: sagging listings 17 Mar 2014 Losing the giant Alibaba IPO has overshadowed the shortcomings of recent listings on the city’s exchange. Seven of its 10 biggest offerings of the past year have sunk in secondary trading. Second-rate “cornerstone investors”, state-backed issuers, and poor advice are to blame.
New World cleans house with $2.4 bln China buyout 14 Mar 2014 Cheng Yu-tung’s property developer is buying the 31 pct of its Chinese unit it doesn’t already own and is issuing shares to fund the deal. Li Ka-shing has made similar efforts to get his house in order. Hong Kong’s tycoons may finally be getting serious about maximizing value.
Li Ka-shing dual listing plan more than cosmetic 4 Mar 2014 The tycoon wants to list his A.S. Watson unit in London or Singapore as well as Hong Kong. For most companies the attractions of multiple listings are skin deep. But if the health and beauty retailer can claw its way into several benchmark indices, it could prove an exception.
China copper IPO seeks gold in financial recycling 18 Feb 2014 Unloved Chinese companies with U.S. listings will be watching China Metal. Just 15 months after it quit the NYSE, the copper recycler is going public in Hong Kong at 10 times its last public market value. With earnings polished by tax refunds, any upside may be short-lived.
From soccer pitch, lessons on Chinese tycoon risks 14 Feb 2014 As trophy hunters flash more cash overseas, the sale of 12 pct of Birmingham FC by a Hong Kong tycoon to an obscure Chinese entity offers a cautionary tale. Having a big personality as a big shareholder is risky, but Chinese buyers bring extra anxieties.