Exclusive | WH Group at odds with Morgan Stanley over fresh IPO pitch

Sino-US pork producer WH Group's on-off Hong Kong offering could come back to the market, but only if the firm and its lead investment bank can agree on terms which could see a new deal priced at a 20 per cent discounted valuation to April's original failed US$6 billion offer.

Two fund managers told the that US investment bank Morgan Stanley had contacted them to gauge interest in a deal valuing WH shares as low as 12 times estimated 2014 earnings, compared to the 15-21 times earnings the sale was pitched at about two months ago.

However, that pricing - pitched unofficially by the bank to test the waters among potential cornerstone investors - is significantly below what the company's management is prepared to accept, according to a senior source within WH who spoke with the on the condition of anonymity.

"An extremely low valuation won't be acceptable to the WH board and shareholders," said the source.

Both Morgan Stanley and WH declined to comment officially on the status of the listing plans.

The listing would aim to raise funds to pay back loans incurred by the formation of WH when Shuanghui, the mainland's top meat producer, bought out US pork supplier Smithfield Foods in a landmark US$4.7 billion deal last year.

The original offering collapsed on a combination of poor market conditions, a disclosure of massive payments to two company executives and conflicting messages to investors from a record 29 investment bank book-runners.