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China Feihe Raises $856 Million in Hong Kong IPO

Bloomberg logoBloomberg 11/6/2019 Julia Fioretti
a plastic bottle on a table: A bottle of milk prepared from infant formula sits on a table Beijing, China, on Saturday, Jan. 12, 2019. More than a decade after tainted infant milk powder in China killed six children and exposed institutional neglect of food safety, Chinese parents still don't trust local companies to feed their babies.© Bloomberg A bottle of milk prepared from infant formula sits on a table Beijing, China, on Saturday, Jan. 12, 2019. More than a decade after tainted infant milk powder in China killed six children and exposed institutional neglect of food safety, Chinese parents still don't trust local companies to feed their babies.

(Bloomberg) -- China Feihe Ltd., a baby formula producer, raised HK$6.7 billion ($856 million) after pricing its Hong Kong initial public offering at the bottom of its marketed range, people familiar with the matter said.

The Beijing-based company sold 893.3 million shares at HK$7.50 each, the people said, asking not to be identified as the information is private. Shares had been offered at HK$7.50 to HK$10 apiece, implying a market value of $8.5 billion to $11.4 billion.

A representative for Feihe said there’s no immediate comment.

The offering is Feihe’s at least second attempt to conduct an IPO in Hong Kong after it applied for a listing in the city in May 2017. The dairy company went private from the New York Stock Exchange in 2013 amid a wave of delistings by U.S.-traded Chinese firms.

The share sale will add to the deal momentum in Hong Kong, which has seen a flurry of IPO activity in the past two months despite ongoing anti-government protests and the prolonged U.S.-China trade war. After a summer drought, Hong Kong saw several billion-dollar-plus IPOs, including the world’s second-largest this year by Anheuser-Busch InBev NV’s Asian unit.

Feihe plans to use the IPO proceeds for offshore debt repayment, potential acquisitions and funding the operation of a new manufacturing plant. The company is expected to start trading on Nov. 13.

JPMorgan Chase & Co., China Merchants Securities Co Ltd. and CCB International Holdings Ltd. are joint sponsors of the offering.

(Updates throughout as the shares have been priced, according to people familiar with the matter.)

To contact the reporter on this story: Julia Fioretti in Hong Kong at jfioretti4@bloomberg.net

To contact the editors responsible for this story: Lianting Tu at ltu4@bloomberg.net, Fion Li, Ville Heiskanen

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