Budweiser Brewer's IPO Draws Cheers From Investors in Debut -- Update
September 30 2019 - 05:24AM
Dow Jones News
By Yifan Wang
Shares of the world's largest brewer's Asian operations climbed
in their trading debut on Hong Kong's stock exchange Monday,
joining the ranks of other richly valued regional beer
companies.
Budweiser Brewing Co. APAC Ltd.'s shares opened slightly above
their initial public offering price after the unit of
Anheuser-Busch InBev SA raised $5 billion from the share sale. The
shares closed at 28.20 Hong Kong dollars (US$3.60), about 4.4%
higher than their IPO price of HK$27 a share, giving the business a
market capitalization of roughly $47 billion.
The company, also known as Budweiser Asia, last week priced its
shares at the lower end of an earlier indicative range, pulling off
a slimmer IPO about two months after shelving a much larger share
sale. Still, the $5 billion raised by Budweiser Asia made it, so
far this year, Hong Kong's largest IPO and the world's
second-largest, after U.S. ride-hailing company Uber Technologies
Inc.'s $8.1 billion New York listing in May, according to Dealogic.
The funds will be used by AB InBev to reduce debt.
Euan McLeish, a senior research analyst at Sanford C. Bernstein,
said an earlier poll indicated most investors were willing to pay a
little more than Budweiser Asia's listing price, which enabled the
shares to trade higher Monday.
"We are not expecting it to go up at a rapid rate," Mr. McLeish
said, adding that investors might find Budweiser Asia shares
attractive in "turbulent times." The consumer staples sector, which
includes companies that make food, beverages and other everyday
essentials, tends to perform in a fairly predictable manner in good
and bad economic conditions.
Analysts said Budweiser Asia's stock could, in the future, also
be used as currency for acquisitions of other beer businesses.
Budweiser Asia, which sells its namesake beer as well as Corona,
Stella Artois and other brands in the region, is now worth more
than Japan's Asahi Group Holdings Ltd., Denmark's Carlsberg A/S and
local rival China Resources Beer (Holdings) Co. At their IPO price,
Budweiser Asia shares implied a price-earnings multiple of 37 times
estimated 2020 earnings, according to Mr. McLeish.
In mid-July, Budweiser Asia called off a $10 billion IPO attempt
due to lukewarm investor response. Later that month, it sold its
Australian unit and came back to the market in early September as a
smaller and faster-growing company that draws most of its sales
from China, South Korea, India and Vietnam.
(END) Dow Jones Newswires
September 30, 2019 05:09 ET (09:09 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
Anheuser Busch Inbev SA NV (NYSE:BUD)
Historical Stock Chart
From Feb 2024 to Mar 2024
Anheuser Busch Inbev SA NV (NYSE:BUD)
Historical Stock Chart
From Mar 2023 to Mar 2024