Charoen Pokphand Group Co. is exploring an initial public offering of its seed and animal feed business in Thailand that could raise as much as $1 billion, according to people with knowledge of the matter.
(Bloomberg) — Charoen Pokphand Group Co. is exploring an initial public offering of its seed and animal feed business in Thailand that could raise as much as $1 billion, according to people with knowledge of the matter.
The Thai conglomerate is restructuring its upstream agricultural operations to prepare for the potential spinoff, which could include its animal feed and seed businesses under Charoen Pokphand Foods Pcl and Chia Tai Co., the people said. CP Group has held initial discussions with prospective advisers on the listing, which could happen as soon as next year, the people said. A share sale could raise $600 million to $1 billion depending on market conditions, they added.
Should a transaction proceed, CP Group’s unit would be joining SCG Chemicals Pcl and Big C Supercenter Pcl in seeking a listing on the Bangkok bourse. The Southeast Asian nation has seen a drop in IPO activity this year with only $291 million raised through first-time share sales, down from $544 million in the same period last year, according to data compiled by Bloomberg.
Considerations are at an early stage and details of the IPO including size and timeline could still change, the people said. A representative for CP Group declined to comment, while a representative for CP Foods said the company has no plan to spin off its animal feed business.
CP Group is controlled by the Chearavanont family, which is Asia’s fifth richest family with a net worth of $28.2 billion, according to the Bloomberg Billionaires Index. Dhanin Chearavanont, who has a net worth of $4.3 billion, is the biggest shareholder and senior chairman of CP Group, which has interests in agriculture, food, retail and telecommunications.
CP Foods was founded in 1978 as a firm primarily focused on producing and distributing animal feed in southern Thailand, according to its website. The company has since expanded into animal breeding and farming as well as cooked and ready meal products ranging from waffles and dumplings to chicken breasts and bacon. The feed business accounts for about 25% of CP Foods’s sales.
Last year CP Foods took its Hong Kong-listed unit CP Pokphand Co. private alongside minority shareholder Itochu Corp. for about HK$7 billion ($890 million). CP Pokphand focuses on manufacturing and sale of animal feed products, breeding and farming in China and Vietnam, its website shows.
Established in 1921 as a seed shop in Bangkok’s Song Wat neighborhood, Chia Tai’s offerings range from seeds, fertilizers and plant protection products to agricultural equipment and technologies, according to its website. The company has more than 1,300 employees, including in seven subsidiaries across Asia and the US.
(Adds CP Foods comment in fourth paragraph.)
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