AB InBev was successful in its second attempt for an initial public offering (IPO) of its Asian business unit after the first attempt in July failed (inside.beer, 13.7.2019). The stock of Budweiser Brewing Company APAC was priced at HKD 27 (USD 3.44) per share, which marks the bottom end of the HKD 27 to HKD 30 indicative range.
As Bloomberg noted, the IPO was saved from failure a second time by Singapore's sovereign wealth fund GIC that commited about 20% of the total funds of the IPO as a cornerstone investor. GIC, formerly known as Government of Singapore Investment Corporation, is a government-owned entity that was established in 1981 by the Government of Singapore to manage Singapore's foreign reserves.
When Budweiser APAC will begin trading on the Hong Kong Stock Exchange on Monday at HKD27 per share, the company will have a market value of USD 45.6 billion, and a forward enterprise value of 17 times its expected EBITDA. The ratio at the first failed IPO was 18.2 times the expected EBITDA.
The IPO helped AB InBev to raise a total of approximately USD 5 billion which is significantly less than the USD 9.8 billion envisaged at the first attempt in July (inside.beer, 2.7.2019). Anheuser-Busch previously listed the company at a range of HKD40 to HKD47.
However, one has to note that the first IPO also included AB InBev’s Australian unit Carlton & United Breweries (CUB) which was sold in the meantime to Asahi Group Holdings for AUD 16.0 billion (USD 11.3 bn). This implied a factor of 14.9 times last year’s normalized EBITDA (inside.beer, 19.7.2019).
Critics were also skeptical about the second IPO because of the political unrest in Hong Kong and a possible suppression of the protests by Chinese troops. 200 IPOs are currently backlogged after Hong Kong saw the worst summer for equity capital raisings in at least six years. Alibaba, the world's fourth-largest internet company by revenue, for example pulled a USD 15 billion IPO last month, opting to wait till the unrest has quieted.
Shares of Budweiser Brewing Company APAC closed 4.4% higher at HKD 28.2 (USD 3.6) on its first day of trading. The stock opened 1.5% above its IPO price of HKD 27.0 at HKD 27.4 (USD 3.50), before rising further through the day.