Dali Foods Raises $1.15 Billion in Hong Kong IPO

Chinese private snack-and-beverage group Dali Foods Group Company Ltd. raised US$1.15 billion in its Hong Kong initial public offering, the largest offering this year for any Chinese privately owned enterprise, according to people with knowledge of the matter.

Dali Foods, partly owned by private-equity firm CDH Investments, priced its IPO at 5.25 Hong Kong dollars (US$0.68) per share via 1.69 billion shares, near the lower end of a HK$5.00-HK$6.15 range, after locking in US$305 million from three cornerstone investors.

Cornerstone investors in Hong Kong commit funds to support an IPO and agree to buy at the float price, but are tied to holding the stock for a certain period, usually six months, after the shares start trading. The participation of such investors can help give other investors confidence to invest in an IPO.

The Fujian-based company's IPO is the biggest in the food and beverage sector since WH Group Ltd.'s US$2.4 billion float in July 2014. Dalian Wanda Commercial Properties Co. Ltd. holds the record among Chinese privately owned enterprises, with a US$4 billion IPO in December last year.

CDH via its subsidiary CDH Delicacy bought a 3% stake in Dali Foods for 1.11 billion yuan (US$1.34 billion) in April this year, gaining a seat on the company's board.

Founded in 1989, Dali Foods' revenue for the first half of this year amounted to 8.5 billion yuan, according to its filing to the Hong Kong stock exchange.

The company is set to start trading on November 20.

Bank of America Merill Lynch and Morgan Stanley are the joint sponsors, or banks responsible for the IPO.

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November 15, 2015 20:45 ET (01:45 GMT)

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