Strong appetite for Leong Hup IPO as offer of 73m shares to public oversubscribed 3.64 times


Tan Sri Francis Lau Tuang Nguang, who is the executive director and group chief executive officer of Leong Hup, told StarBiz that a significant portion of the proceeds to be raised from the IPO would be used to fund its regional expansion.

KUALA LUMPUR: Poultry giant Leong Hup International Bhd's initial public offer (IPO) of 73 million shares to the Malaysian public was oversubscribed by 3.64 times. 

The 839.50 million IPO shares offered to Malaysian and foreign institutional and selected investors, were also heavily oversubscribed.

The strong oversubscription showed Tan Sri Francis Lau Tuang Nguang's successful return to the local bourse with the biggest IPO in almost two years, reflecting investors’ strong appetite for chicken producers.

Leong Hup, which owns livestock feed mills and poultry businesses in five countries raised up to RM1.2bil in its IPO that includes an over-allotment option.

The IPO price values Leong Hup at about RM4bil, giving it the crown of the most valuable poultry producer on Bursa Malaysia.

Tricor Investor & Issuing House Services Sdn Bhd said on Tuesday there were 14,841 applications for 339.07 million issue shares with a value of RM372.97mil received from the Malaysian public for the 73 million shares.

For the Bumiputera category, there were 2,330 applications for 50.57 million shares with a value of RM55.63mil or an oversubscription rate of 0.39 times. 

For the non-Bumiputera category, there were 12,511 applications for 288.49 million shares with a value of RM317.34mil, or an oversubscription of 6.90 times.

The 25 million shares available to eligible persons were fully subscribed.

“The joint global coordinators and joint bookrunners have confirmed that the 839.50 million IPO shares offered to Malaysian and foreign institutional and selected investors, including Bumiputera investors approved by MITI under the institutional offering have been heavily oversubscribed by Malaysian and foreign invcestors,'' Tricor said.

The notices of allotment for the IPO shares will be posted to all successful applications on or before May 15.

The IPO price values Leong Hup at about RM4bil, giving it the crown of the most valuable poultry producer on Bursa Malaysia. 

Earlier, Maybank Investment  Bank said the institutional price and final retail price has been fixed at RM1.10 per share. 

The price was fixed after the completion of the bookbuilding process under the institutional offering on May 3. The retail offering closed at 5pm on the same day.

To recap, Leong Hup targeted to raise up to RM1.2bil from its IPO that includes an offer for sale of shares held by existing shareholders and the issuance of new stocks.

The IPO involved the offer for sale of 937.5 million shares or 25.68% of the company. This excludes an over-allotment option that could increase the public shareholding spread to 29.54%.

The IPO comprised an offer for sale of 687.5 million shares by existing shareholders – the Lau family and private equity firm Affinity Equity Partners – and the issuance of 250 million new shares at RM1.10 each.

Of the total amount to be raised, RM275mil will go to the company. Leong Hup said RM207.7mil, or 75% of the amount, would be set aside for business expansion.

The Philippines is the biggest recipient of the proceeds from the IPO, followed by Vietnam (RM47mil) and Malaysia (RM40.7mil).



Francis Lau Tuang Nguang , Leong Hup , IPO

   

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