One wouldn't know it judging by the latest panic buying in US stocks which are once again en route to hit all time highs within a few days, but one company that is not participating in the latest bout of buying euphoria is Chinese pork giant WH Group, the recent buyer of Smithfield foods.
It was only yesterday when Bloomberg reported [6]that "WH Group, the world’s biggest pork supplier, is poised to raise about $1.3 billion in an initial public offering that had been cut by more than half because of slack investor demand, said people with knowledge of the matter. The company plans to sell 1.3 billion new shares at around HK$8 ($1.03) each, the low end of a marketed range, said the people, asking not to be identified because the information is private. WH Group is due to set a final price tomorrow after offering the shares at HK$8 to HK$11.25, according to revised terms for the deal obtained by Bloomberg News on April 23."
Fast forward to today when we find that the IPO, already set to be far weaker than originally expected, has just been pulled. SCMP updates [7]that WH Group has postponed its US$1.9 billion share sale, two sources with direct knowledge of the decision have told the South China Morning Post, effectively axing what was once billed as the biggest initial public offering of stock in Asia so far this year.
The decision came after a decision last week to slash the price and the offer size of the deal from an original US$5 billion, which failed to tempt potential investors who were already signalling their unwillingness to swallow such a large transaction.
The reason:
“In light of deteriorating market conditions and recent excessive market volatility, the company, having consulted the joint sponsors, has decided that the global offering will not proceed at this time,”
The S&P trading just shy of all time highs is now equivalent to "market conditions"? Ok then.
But the biggest loser(s)? The 29 investment banks working on the deal. Although don't cry for them - we are confident once the rigged, ZIRP-fueled market takes out all time highs on short notice, that the deal will be right back and taking advantage of "Other Widows' and Oprhans" money around the world, as the insider take advantage of the late stages of the Fed's equity bubble.