By Clarence Leong
WH Group Ltd.'s shares are trading near a three-month high after the world's largest pork producer said it plans to buy back US$1.93 billion of shares.
The company intends to buy back 1.92 billion shares at 7.80 Hong Kong dollars each, a 17% premium to the last traded price on June 1, it said Sunday. The offer would put WH's market value at HK$115.02 billion. The stock was recently 5.8% higher at HK$7.33.
WH said one reason for the buyback is that it doesn't foresee any material capital outlay or commitments apart from paying HK$1.84 billion of dividends in July.
WH's primary operations are located in China and the U.S., which collectively accounted for more 90% of the company's revenue in 2020.
Citi analysts said that "such a big scale of cash buyback proposal is a positive surprise to the market," while its U.S. business is expected to recover quarter over quarter. Uncertainties related to a regional outbreak of African swine fever in some Chinese markets look priced in, Citi said.
Write to Clarence Leong at clarence.leong@wsj.com
(END) Dow Jones Newswires
06-06-21 2327ET