Budweiser Brewing Co. APAC, takes another shot at listing its Asian business looking to increase up to US$7.6 billion in Hong Kong amidst the awful lot of protests happening there plus the developing trade tension between China and the USA.
The world’s largest brewer Anheuser-Busch InBev SA has begun taking orders for its Hong Kong initial public offering earlier than the planned listing scheduled on Sept. 30.
Budweiser Brewing Co. APAC plans to raise a baseline 34 billion to 37.9 billion Hong Kong dollars by selling new shares. If demand proves to be strong, AB InBev could boost the deal’s size to as much as US$7.6 billion.
It was in July when AB InBev nearly raised US$10 billion and attempted to list the business, at a valuation of up to US$63.7 billion. Prospective investors and analysts revealed that the failure to enlist was basically due to the high valuation expectations with market conditions partly to blame.
After selling its Australian units to Japan’s Asahi Group Holdings Ltd. for US$11.3 billion, it is now marketing a smaller, fast-paced business that is more focused on China and other emerging markets.
Budweiser APAC Chief Executive Jan Craps believed it was the right moment to do the IPO. The revised stock sale would be the world’s second-largest IPO this year, after ride-hailing giant Uber Technologies ’ US$8.1 billion market debut in New York, according to Dealogic.
Budweiser APAC has secured a US$1 billion pledge from Singaporean sovereign-wealth fund GIC Pte. Ltd. to act as a cornerstone investor in this current attempt. Cornerstones, in essence were utilized to help entice other prospective buyers.
KCG Securities Asia Investment manager agrees that an outstanding cornerstone could guarantee the to go smoothly.
There are indeed a lot of challenges that could directly or indirectly affect the listing attempt The US-China trade dispute and the occurrence of social unrest in recent protests proved to be such huge impact contributors. Violent protests for one, have disrupted flights and road transport, denting the city’s image as a safe location and an international financial hub.
Even Mr. Cramps cannot deny how \volatile and challenging the environment is today, but they are optimistic about Hong Kong still being the best financial center in Asia for them to do the listing.
China’s Shanghai Henlius Biotech Inc. faced the same issues and has tested investors’ appetite in both the equity and bond markets in Hong Kong.
According to a summary of terms seen by The Wall Street Journal, Budweiser APAC deal’s price range equates to 33.8 to 37.5 times the earnings management estimates the business could make next year. It is broadly in line with Hong-Kong listed Chinese brewers China Resources Beer Holdings Co. and Tsingtao Brewery Co.
AB InBev brews about 25%r of the world’s beers. It owns hundreds of brands including Budweiser, Stella Artois and Corona. But the deal burdened the brewer with debts, which it now aims to dwindle to about US$80 billion.