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By Julie Zhu
HONG KONG (Reuters) - Brewer AB InBev 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 is still the second-biggest globally so far this year, trailing only the $8.1 billion flotation of Uber Technologies Inc 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 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.