Sell-down in Yurun raises $106 million

A sell-down in China Yurun Food Group yesterday raised HK$833 million ($106 million) for an undisclosed, non-affiliated institutional seller. The seller cleared its entire 4.6% stake in the company.
 
A total of 70.9 million shares were offered at a price between HK$11.63 and HK$12 a share, representing a discount of between 4% and 7% to yesterday's closing price of HK$12.50. The final price was set at HK$11.75, just below the mid-point, for a 6% discount.
 
The order book was covered within 15 minutes, but it stayed open to allow investors in the US to participate. It was described as comfortably covered by more than 50 accounts. Investors were predominately long-only and fundamental investors, mainly coming from Asia, with some interest from the US.

Yurun is one of China's largest producers of meat products. Headquartered in Nanjing, the company specialises in fresh and frozen pork products under the following brands: Yurun; Popular Meat Packing; Furun; and Wangrun.

Yurun's share price has had a strong performance in 2009 -- it is up 37.2% year-to-date, although it did drop 10% one day in late April when the H1N1 virus started to make the headlines. The stock fell 0.16% yesterday to HK$12.50, but remains close to last Thursday's closing price of HK$12.64, which is the highest close so far this year.

The deal, which was arranged by UBS, was in the market at the same time as five placements for Indian companies. One source close to the deal said the Indian deals had little impact on the outcome of the Yurun transaction.