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Smithsonian reveals ag-focused website, 'American Enterprise' exhibit
Story Date: 7/17/2013
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Source: Lisa M. Keefe, MEATINGPLACE, 7/16/13
Shuanghui International Holdings, the company that has agreed to buy Smithfield Foods Inc., wants to list the merged company on the Hong Kong stock exchange once the transaction is completed, according to a report by the Reuters news agency.
The Reuters report puts the value of such an initial public offering at about $4 billion; Shuanghui International’s offer to buy Smithfield includes $4.7 billion in cash, plus the assumption of Smithfield’s debt, for a total value of $7.1 billion. The purchase would be financed by $7 billion in loans from the Bank of China and Morgan Stanley.
A stock offering on the Hong Kong exchange would place a higher valuation on the stock than would be available on other exchanges, including those in the United States, Reuters’ sources are quoted as saying. Such an offering also would provide a return on investment for Shuanghui International’s private equity investors, which include Goldman Sachs, a Chinese investor group and one from Singapore, the Irish dairy company Kerry Group, and the senior management of Henan Shuanghui Investment & Development Co. Ltd., China’s largest hog producer and pork processor.
In response to an inquiry from Meatingplace, Smithfield's vice president of investor relations, Keira Lombardo, said in an email, "Shuanghui International is focused on completing its acquisition of Smithfield Foods, which we think will benefit the stakeholders of both companies. We are not aware of and we will not speculate about any plan for the combined company to access the equity capital markets."
Shuanghui International’s main asset is a 73.26 percent stake, held directly and indirectly, in Henan Shuanghui, which is itself listed on the Shenzhen stock exchange, Reuters said. Henan Shuanghui has a market value of about $15 billion, based on its recent stock price.
Of course, the Shuanghui-Smithfield deal still is working its way through the various necessary approvals. Although it passed the Hart-Scott-Rodino review earlier this month, it still is being reviewed by the Committee on Foreign Investment in the United States (CFIUS) for any potential national defense implications.
As well, the Hong Kong stock exchange rules require one year of ownership before a merged entity can list, Reuters noted.
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