Anheuser Busch InBev has cancelled what would have been the year’s largest IPO as investors apparently balked at its valuation of its Asian business.

The world’s largest brewer cited “prevailing market conditions” in announcing it would not proceed with the listing of Budweiser APAC on the Hong Kong Stock Exchange. The offering had been expected to raise $8.3 billion to $9.8 billion to help heavily indebted AB InBev reduce its leverage.

But sources involved in the deal told Reuters that investors were unwilling to accept AB InBev’s valuations for Budweiser APAC. The pricing of the IPO valued the business at 16 to 18 times its expected enterprise value (EV) relative to expected EBITDA in 2020, according to the sources.

EV/EBITDA helps investors compare companies’ operating performance by stripping out the effects of different financing costs.

“This is likely a case of valuation push-back, not market conditions,” said Kathleen Smith, founding principal at Renaissance Capital, a U.S.-based research firm and manager of IPO-focused exchange-traded funds.

The South China Morning Post reported that the offering was 3.7 to 5 times oversubscribed, well below initial forecasts that it would be 10 to 15 times oversubscribed.

Budweiser “is expected to be a good long-term investment but for retail investors who want to bet on short-term gain, it is not that attractive,” said Louis Tse Ming-kwong, managing director of Hong Kong-based VC Asset Management.

AB InBev announced in May that it would offer a minority stake in Budweiser APAC to the public. It preliminarily set the price at HK$40 to $HK47 each — which, even at the low end, would have made it the biggest IPO of 2019, ahead of Uber’s $8.1 billion deal.

According to Reuters, investor skepticism about AB InBev’s valuation of its subsidiary “led to weak orders from top-class U.S. ‘long only’ fund managers — prized as long-term investors — who had been expected to place big orders.”

“Many long-onlys got cold feet and didn’t show up on the last day as expected,” a source told Reuters.

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