Beijing-headquartered private equity firm CDH Investments is offloading a 6 percent stake in Hong Kong-listed pork producer WH Group worth approximately $730 million, as reported by sister title Private Equity International.
The firm is selling 884 million shares at an indicative price range of HK$6.51 ($0.84; € 0.75) to HK$6.58 per share, representing a 6.5 percent discount against Friday’s closing price, according to a company filing.
This is the firm’s fourth partial exit from the pork producer. WH went public in Hong Kong in August 2014, raising $2 billion in its initial public offering. Last August, CDH sold down shares worth almost $1.2 billion. And in October, it sold an additional 6.83 percent stake for $806 million.
The latest sale would see CDH’s shareholding in WH drop from 9.27 percent to 3.24 percent, as per the filing.
CDH first invested in WH, then known as Shuanghui International, in February 2007 for an undisclosed sum. This was followed by further investments in May and September as well as later on in January 2010. Over time, the firm held a 30 percent equity stake in the business through seven of its funds: CDH Shine Limited, CDH Shine II Limited, CDH Shine III Limited, CDH Shine IV Limited, CDH Shine V Limited, CDH V Sunshine I Limited and CDH V Sunshine II Limited, and through co-investments from Temasek Holdings and Goldman Sachs.
It is understood that the sale will mark exits for CDH Shine, CDH Shine II, CDH Shine III, and CDH Shine IV.
WH is the largest pork company in the world with the top market share in China, the US and some markets in Europe. It conducts its operations through Henan Shuanghui Investment & Development Company, the largest animal protein company in Asia, and Smithfield Foods, the largest pork company in the US. The group reported a 3.2 percent increase in its annual turnover to $5.3 billion and a 2.2 percent hike in its operating profit to $418 million in the first quarter of 2017.
CDH’s private equity business manages over $10.5 billion across five USD-denominated funds and two RMB-denominated fund. The firm held a $800 million final close on its China mid-market growth fund in December last year.
A representative for CDH could not be reached for comment by press time.