HONG KONG (Reuters) – Budweiser Brewing Company APAC , the Asia-Pacific business of Anheuser-Busch InBev (AB InBev) , will not price its Hong Kong IPO of up to $9.8 billion by Friday as planned, two people with knowledge of the matter said.
Budweiser APAC, whose portfolio of more than 50 beer brands includes Stella Artois and Corona, received offers below the HK$40-$47 ($5.13-$6.02) per share target from some large U.S. investors, other people familiar with the matter said.
Delay - Company - Investors - Bottom - Range
The delay comes after the company reportedly guided potential investors toward the bottom of the range of what was expected to be the world’s biggest initial public offering (IPO) this year.
The company’s executives and representatives from the deal’s co-sponsors, JPMorgan and Morgan Stanley , met in New York to discuss pricing after the books closed on Thursday.
Delay - Deal
It was not immediately clear why there was a delay in pricing for a deal that had already been over-subscribed.
People familiar with the issue said it was struggling to secure enough demand from long-term investors, with some offers below the target range.
Investors - Orders - Shares - Effort - Allocation
Typically investors put in orders for more shares than they actually expect to receive in an effort to ensure they get a good allocation. Deals where those investors end up with more than they really expected often trade poorly to begin with.
The company has until 11.59 pm (1559 GMT) on Monday in Hong Kong to finalize its offer price, according to its prospectus. If it does not finalize the price by then, the IPO will lapse.
Hong - Kong - Stock - Exchange - IPOs
The Hong Kong Stock Exchange allows IPOs to price at as much as 10 percent below the indicative range, but this has to be announced in advance, which has not happened in this case. It can also not now change the offer size.
A spokesman for Budweiser APAC declined to comment.
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