LTG eyes equity offering worth up to $800M

Tycoon Lucio Tan-led LTG Group Inc. is preparing to launch an equity offering worth $600 million to $800 million, which is seen to widen its public float and raise fresh funds for expansion.

The conglomerate plans to sell as much as three billion common shares through a top-up scheme. However, industry sources privy to the transaction said the group might opt to reduce the number of shares if it could fetch a good price for the offering.

The offer circular for this is coming out after Easter while the equity deal will be launched in April or May.

The source said the consolidation of all assets that would be folded into LTG had been completed and the offer circular might come out as early as this week, in time for an offering planned by April.

“Everything is ready,” a source said.

Investment bank UBS has been mandated as the sole bookrunner for this issuance.

Under the top-up offering framework, LTG’s controlling shareholder Tangent Holdings will place out some of its shares but it will eventually subscribe to the same number of new shares at the same price. In such way, Tangent will only be lending its shares to allow LTG to raise fresh equity.

Proceeds from the offering are expected to be used for LTG’s banking, property and beer businesses.

As of Friday’s close, LTG shares were priced at about P16.80 per share, giving the company a market capitalization of P145.7 billion.

LTG—previously Tanduay Holdings—has acquired a 36-percent (indirect) interest in Philippine National Bank (the surviving entity in the merger with Allied Bank) and is working to raise its interest to 60 percent. It has also gobbled up 99.58 percent of Fortune Tobacco Corp. that, in turn, owns 49.6 percent of PMFTC Inc. (a partnership with Phillip Morris). LTG also owns 99.3 percent of beer-maker Asia Brewery Inc. (and subsidiaries), 100 percent of hard liquor manufacturer Tanduay Distillers and 99.3 percent of property developer Eton Properties Inc. It said it would defer the inclusion of its interest in flag carrier Philippine Airlines, now managed by San Miguel Corp., in this consolidation.