Reuters: Private Equity: UPDATE 1-China Yongda pulls $434 mln HK IPO - IFR

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UPDATE 1-China Yongda pulls $434 mln HK IPO - IFR May 28th 2012, 05:50 Mon May 28, 2012 1:50am EDT * Automobile dealer's move is due to weak market conditions-IFR * China Yongda had extended bookbuilding by four days * Asian markets down 11.5 in May, weighing on new listings (Adds underwriters, details of Asian market activity, IPO volumes) HONG KONG, May 28 (Reuters) - China Yongda Automobiles Services decided to pull an up to $434 million Hong Kong initial public offering because of deteriorating market conditions, IFR reported on Monday, citing two sources with direct knowledge of the plan. The Shanghai-based car dealership had already extended the bookbuilding for the deal by four days until May 28 to try and secure more orders, but with limited success, said IFR, a Thomson Reuters publication. China Yongda's move underscores investors' weak appetite for new listings after a slump in stocks in Hong Kong and across the Asia-Pacific. It also adds pressure on companies that have lined up to sell shares in the Chinese territory and on bankers arranging the deals to consider possible alternatives. China Yongda launched the deal on May 14, offering 312.2 million shares at a range of HK$7.6-HK$10.8, putting the total offering size at up to HK$3.37 billion ($434 million). The company was looking to price the deal at 8.1 to 11.5 times its 2012 earnings, IFR added. HSBC and UBS AG were hired as joint global co-ordinators and joint bookrunners with BoCom International for the China Yongda offering. A Yongda spokesman could not be reached immediately for comment. MSCI's index for Asia ex-Japan has fallen about 11.5 percent since the beginning of May and Hong Kong's benchmark Hang Seng index is down 11.3 percent. IPOs had their worst start in about four years in the Asia-Pacific region in 2012, with overall equity market activity down about a fifth from 2011 as investors fretted at falling markets. Volumes for initial offerings in Hong Kong plunged about 82 percent through early May from same time last year. ($1 = 7.762 Hong Kong Dollars) (Reporting by Jing Song and Fiona Lau; Writing by Elzio Barreto; Editing by Muralikumar Anantharaman) Link this Share this Digg this Email Reprints

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