Pepsi sets P3.50/share price for stock offering
By Elizabeth Sanchez-Lacson
Philippine Daily Inquirer
First Posted 19:23:00 01/20/2008
MANILA, Philippines--SOFT DRINKS firm Pepsi-Cola Products Philippines Inc. has set its initial public offer price at P3.50, the lower end of its price range, to raise for the company and its shareholders at least P4 billion, one of the company's underwriters said.
BDO Capital and Investment Corp. president Eduardo Francisco said that at this price, underwriters were optimistic that local investors would "grab the opportunity" to pick up the stock.
The company earlier lowered its price range to between P3.50 and P4.30 from P6.04 to allow investors to buy the shares at a cheaper price amid the market's volatility.
Francisco said concerns on the local equity market, already down 12.5 percent so far this year amid fears of a US recession and sub-prime mortgage losses, encouraged the company to be cautious.
"Overall market sentiment is just bad, especially with US market drops and possible additional selloffs if more sub-prime write-offs are announced," he said.
The company is offering 1.14 billion shares consisting of 380.78 million new shares and up to 761.56 million shares held by stockholders Guoco Assets Inc. and The Nassim Fund.
Nearly 70 percent of the shares up for sale would be offered to foreign investors, with the rest to be sold domestically.
Pepsi said it would use an estimated P1.35 billion in net proceeds from the offering of new shares to fund capital expenditures in 2008 and 2009, particularly to add noncarbonated beverage production facilities at several of its plants, expand soft drinks production at plants currently running near capacity and increase PET production capacity at several of its manufacturing plants.
PET is polyethylene terephthalate, a type of plastic used to manufacture soft drink containers and rigid packages.
Pepsi is conducting its domestic offer period Monday until Jan. 28. Its tentative listing date is Feb. 1.
UBS Investment Bank will be the lead underwriter for the international offer while ATR Kim Eng and BDO Capital are the joint domestic underwriters.
Pepsi is the licensed bottler of PepsiCo beverages in the Philippines. Its products include juices, iced teas, sports and energy drinks. Its beverage brands include Pepsi, Diet Pepsi, Pepsi Light, Pepsi Max, 7Up, Mountain Dew, Gatorade, Lipton Iced Tea, Tropicana, Propel and Sting.
In 2006, it sold 110 million eight-ounce equivalents of carbonated beverages and 10 million eight-ounce equivalent cases of noncarbonated beverages.
It also manufactures and packages products at 11 production plants nationwide and distribute them through 106 sales offices, and warehouses.
Pepsi competes with Coca-Cola Bottlers Philippines Inc., which is now 100 percent owned by Atlanta-based Coca-Cola Co.
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