Willie Holdings, the controlling shareholder of
Yurun, one of China’s largest pork distributors, is selling 166
million of its shares at a 9 per cent discount to Yurun’s closing
price yesterday, netting HK$3.96 billion (RM1.63
billion).
Hopu Investments, run by Chinese dealmaker Feng Feng Lei and
former Goldman banker Richard Ong, has taken up US$167 million
worth of the shares, a source close to the deal said.
Temasek has bought US$60 million worth of shares and its
investment arm, Seatown, has taken up worth US$20 million, the
source, who declined to be identified because of the sensitive
nature of the deal, said.
Yurun did not identify the investors in the share placement.
Hopu declined to comment, while Temasek and Seatown were not
available for comment.
Hopu was one of two Chinese entities that invested about US$800
million in July for a 20 per cent stake in China Mengniu Dairy.
Mengniu was one of the Chinese dairies found to have sold milk
containing melamine during the 2008 tainted milk scandal, a
discovery that sent its shares down nearly 70 per cent.
A month before Hopu’s deal for Mengniu, private equity firm
Kohlberg Kravis Roberts & Co. completed a series of investments
in Ma Anshan Modern Farming Co Ltd, a leading dairy farm company
headquartered in China’s central Anhui province.
Private equity and investment firms have, for the past several
years, tried hard to put money into China’s booming consumer
sector, though, surprisingly, few of these deals have been
completed.
Seatown is run by Richard Ong’s brother Charles Ong, who was
previously Temasek’s chief strategist. To read more about Seatown,
click [ID:nSGE61902N]
The investment in China Yurun is now one of several deals
connecting the Ong brothers.
While Charles was at Temasek, the fund and Hopu bought a stake
in Iron Mining International, an iron ore producer.
Temasek and Hopu were also among the buyers for Bank of
America’s US$7.3 billion stake in China Construction Bank in
May.
The stake of Willie Holdings, which is selling the 166 million
China Yurun shares at HK$23.88 each and will buy 90 million new
shares on completion of the sale at the same price for US$277
million, will be reduced to 29.98 per cent on completion of the
transactions from 36.14 per cent now.
China Yurun said it will use the net proceeds to expand its
production capacity.
Morgan Stanley and UBS are the share placement agents.
China Yurun shares fell 10.5 per cent to a four-week low of
HK$23.50 this morning. They trimmed the losses to trade at HK$24 by
midday.
The shares had risen 14.13 per cent from the start of 2010
through yesterday’s close, bucking a 1.65 per cent drop in the
broader market. — Reuters
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