HONG KONG – WH Group has scrapped its initial public offering, the global pork producer announced April 29. The IPO had a record 29 underwriters.
In a statement, the company said: “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. Accordingly, the International Underwriting Agreement relating to the International Offering will not be entered into and the Hong Kong Underwriting Agreement relating to the Hong Kong Public Offering will not become unconditional.”
Various factors contributed to the IPO's failure. Lackluster demand from investors forced the company to slash its IPO to less than $2 billion from a high of nearly $5.3 billion. The spread of porcine epidemic diarrhea virus among US hog farms scuttled the company's plan to import cheap US pork as prices of pork sharply increased. Additionally, a $600 million pay-out to two WH Group executives raised investors' concerns about corporate governance.