Malaysian poultry producer Leong Hup is targeting raising as much as $291 million in a scaled-down IPO in mid-May, sources with knowledge of the matter said, in what would be the Southeast Asian nation’s largest listing in nearly two years.
The company cut the offer size to up to 1.2 billion ringgit ($290.84 million), including an overallotment option, from an earlier target of $600 million to match subdued investor sentiment amid choppy markets, said the sources, who declined to named as the talks were still private.
The indicative offer price will be in a narrow band of 1.09-1.10 ringgit, as demand has proven “overwhelming”, one of the sources said.
The source also said revised valuations for the IPO are now “deemed attractive” at around 15 times forward earnings.
Two weeks ago, Malaysia’s biggest fast-food operator QSR Brands shelved its $500 million IPO plans as potential local investors felt its valuations were too lofty.
Pending for over a year, Leong Hup‘s offer is set for launch on Thursday, and will be the largest since Lotte Chemical Titan’s issue in July 2017.
Malaysia’s stock market has been soft since May as uncertainty over the country’s policies surfaced after veteran leader Mahathir Mohamad ousted the ruling coalition of more than six decades in the elections.
The benchmark stock index fell 6 percent last year, in line with regional markets. Year-to-date the index has fallen a further 3.7 percent, a laggard among its neighbouring peers.
Total fundraising in the primary market tumbled to $170 million in 2018, the lowest in 20 years, according to Refinitiv data.
The source also said cornerstone investors on the deal include pension fund Employees Provident Fund (EPF), insurer AIA Group and agricultural goods processor and merchant Louis Dreyfus Company.
EPF, Louis Dreyfus Company did not immediately respond to requests for comment while AIA was not immediately reachable.
Leong Hup is majority-owned by the founding Lau family and also backed by private equity firm Affinity Equity Partners, both of whom will remain shareholders post-listing.
The company, which farms poultry and produces livestock feed and poultry products, has operations in Indonesia, Vietnam, Philippines and Singapore.
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Malaysian poultry business Leong Hup eyes $600m listing by year-end
Reuters