* Budweiser APAC prices Hong Kong IPO at HK$27 per share
* Shares were marketed in indicative range of HK$27-HK$30
* IPO more attractive now than July's cancelled one - source
* At IPO price, Budweiser to have $45.6 bln market value
* Trading to begin on Sept 30
(Adds deal details about Budweiser, Topsports IPOs)
By Julie Zhu
HONG KONG, Sept 24 (Reuters) - Brewer AB InBev ABI.BR
priced the Hong Kong IPO of its Asia-Pacific unit at the bottom
of a marketed range to raise about $5 billion, indicating deals
in the pipeline may need subdued valuations to succeed as
protests in the city unnerve investors.
Anheuser-Busch InBev NV (AB InBev), the world's largest
brewer, relaunched the initial public offering (IPO) this month
after cancelling a plan for a bigger IPO of the unit in July
citing "several factors, including the prevailing market
conditions". Separately, Topsports International Holdings, the sportswear
business of Chinese footwear retailer Belle International,
launched on Tuesday a Hong Kong IPO of up to $1.2 billion, as
per a marketing term sheet seen by Reuters. The AB InBev and Topsports offerings are among a handful of
recent sizeable IPOs seen as tests of investor sentiment
following anti-government protests that have roiled Hong Kong
for nearly four months and weighed on its stock market.
Markets more generally are also on edge amid a trade dispute
between the United States and China, as well as slowing global
growth.
The IPO of Budweiser Brewing Company APAC Ltd 1876.HK is
still the second-biggest globally so far this year, trailing
only the $8.1 billion flotation of Uber Technologies Inc
UBER.N in May, data from Refinitiv showed.
AB InBev, whose portfolio of more than 50 beer brands
includes Stella Artois and Corona, said on Tuesday the Budweiser
IPO was priced at HK$27 ($3.44) per share, the bottom end of the
HK$27 to HK$30 indicative range, confirming what sources had
earlier told Reuters.
AB InBev's revived IPO excludes its Australian operations,
which it agreed to sell to Japan's Asahi Group 2502.T for $11
billion shortly after the previous IPO was shelved.
Without Australia, a large but mature market, AB InBev's
Asia-Pacific operations would be more focused on faster growth
markets such as China, India and Vietnam, which has made the IPO
an easier sell, sources have said.
"The company has top-notch assets and without the
slow-growing Australian operations the deal has become more
attractive than last time," said one source with knowledge of
the Budweiser IPO.
"And today's low end pricing would give the stock more
upside potential in the public market."
BOOST FOR HONG KONG?
The IPO pricing comes as Hong Kong leader Carrie Lam said on
Tuesday that she hoped peaceful and rational dialogue will help
find a way out of the protests gripping the former British
colony.
At HK$27 per share, Budweiser will have a market value of
$45.6 billion, and a forward enterprise value (EV) to expected
EBITDA - earnings before interest, tax, depreciation and
amortization - valuation of 17 times, according to sources with
knowledge of the matter. By comparison, the aborted July float
was aiming for a forward EV/EBITDA of up to 18.2 times.
The new valuation is cheaper than the 23.5 times forward
EV/EBITDA that its rival China Resources Beer Holdings 0291.HK
commands.
Budweiser said last week it had lined up Singapore sovereign
wealth fund GIC to invest $1 billion in the IPO as its
cornerstone investor, lending some stability to the IPO. It did
not have a cornerstone investor during the July float attempt.
A successful completion of the Budweiser IPO, though, could
encourage more Hong Kong IPO candidates to firm up their plans.
China's biggest e-commerce company Alibaba Group Holding Ltd
BABA.N delayed last month its up to $15 billion listing in the
city amid the growing political unrest there. More IPOs will be a boost for Hong Kong as a listings hub,
with the city currently lagging its New York rivals. Companies
raised $10.8 billion in new listings in Hong Kong as of
mid-September, well short of the $41 billion raised in New York,
according to Refinitiv data.
The Budweiser IPO included a rare "upsize" option that
enabled the Belgium-based brewer to sell up to 36.8% more shares
in the offering. That option was partially exercised, it said.
Proceeds from the IPO will help AB InBev reduce debt of over
$100 billion accumulated following the purchase of rival
SABMiller in late 2016. The stock of Budweiser will debut on
Sept. 30.
The brewer also has another goal - creating an Asian
champion to spur consolidation.
Analysts see the brewing assets of San Miguel of the
Philippines SMC.PS or of ThaiBev TBEV.SI as possible
partners or targets. JPMorgan JPM.N and Morgan Stanley MS.N are the joint
sponsors of the flotation. Bank of America Merrill Lynch and
Chinese investment bank CICC are the global coordinators for the
offering.
Topsports, the largest sportswear retailer in China, is set
to price its IPO on Oct. 3 and trading of its shares is
scheduled to start on Oct 10. L3N26F07G
Topsports declined to comment on its IPO.
($1 = 7.8380 Hong Kong dollars)
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Hong Kong mops up after fresh violence, braces for Oct 1
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