Tuesday, July 22, 2014

Smithfield owner scales down share sale

WH Group, which paid $7.1 billion for Smithfield Foods Inc., has drastically reduced its attempt to raise money on the stock markets.

It is now getting ready to offer about $2.36 billion worth of shares on stock exchanges in China and the United States, far lower than its initial plans to raise $5.3 billion.

Its target is about 11.5 times it annual earnings, says Bloomberg-owned Business Week magazine.

Smithfield, based in Virginia, claims to be the world’s largest hog-producing and pork-packing company. That claim may not be true, given the number of hogs raised in China and the emergence there of huge companies, such as WH Group.

At one time Smithfield owned Schneider Corp., which it bought from the Schneider family in Kitchener. 

It later sold the business to Maple Leaf Foods Inc. which also bid to buy from the Schneiders, but was rejected because of long-standing animosity between the Schneiders and Canada Packers, which became part of Maple Leaf Foods.