CDH Investments Seeks $1.2B Partial Exit From WH Group

Chinese alternative investment firm CDH Investments is selling up to US$1.19 billion worth of shares in Chinese pork producer WH Group to allow a partial exit from an investment it made in 2007, according to a disclosure filing.

CDH is selling around 1.55 billion shares, or a 10.61% stake, at HK$5.95 apiece, with part of the shares being bought by existing investors including Rise Grand Group Ltd., an entity partly owned by WH Group’s chairman, Wan Long.

CDH’s shareholding in the Chinese pork company will be reduced to 19.77% from 30.39% on completion of the deals, WH Group said.

The timing of the share sale is optimal, as WH Group’s stocks have recovered during the past few months to around HK$5.99 apiece today in Hong Kong, compared to under HK$5 for most of the past two years.

CDH made two undisclosed investments in 2007 and 2010 in Shuanghui Group, as the company was known back then.

In 2014, WH Group completed an IPO in Hong Kong to raise a total of HK$15.9 billion (US$2 billion).

At the time, CDH held a 38.1% stake in the business, while a private equity unit of Goldman Sachs, Temasek Holdings and New Horizon Capital all held minority interests.

In September 2013, WH Group acquired U.S. pork producer Smithfield International for approximately US$7.1 billion.

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