World’s biggest pork producer WH Group makes US$1.93 billion buyback offer to boost value as stock underperforms market
- WH Group is offering HK$7.80 per share to buy back 13 per cent of its capital at a premium over market price
- The cash offer at 12.6 per cent premium to June 2’s last traded price comes as stock underperforms the Hang Seng Index
The stock rose 11 per cent to an intraday high of HK$7.54 on Monday, its highest level since April 2020, before closing at HK$7.33 on Monday. Hong Kong’s benchmark Hang Seng Index fell 0.5 per cent on the same day.
The share price rose after the firm offered to pay HK$7.80 each to cancel 1.92 billion of its outstanding shares in the buyback to “enhance shareholder value”, according to an exchange filing on Sunday. BofA Securities and Morgan Stanley are the agents conducting the buyback on its behalf, it added.
The cash offer represents a 17.3 per cent premium to its price on June 1, and 12.6 per cent above its June 2 level before the stock was halted pending the announcement, according to Bloomberg data.
Wan Long, the 81-year-old chairman and chief executive of WH Group, said the offer provides an opportunity for the shareholders either to cash in their investments or to enjoy a higher return on equity per share if they opt to retain their holdings.
“The offer provides the shareholders a mechanism which allows them to decide upon their preferred level of investment in the company and allows the shareholders who do not wish to exit from their investments in the company to enjoy the benefits of enhanced shareholder value,” Wan said in the exchange filing.
