Gokongwei group planning IPO for retail unit

The Gokongwei group plans to bring its privately held retail arm to public hands this year—an exercise that may raise as much as $800 million, newswire Bloomberg reported Friday.

The group of tycoon John Gokongwei declined to comment on the Bloomberg report but talks about the prospective initial public offering (IPO) of Robinsons Retail Group have been circulating in the last few weeks.

Robinsons Retail Group is one of the country’s biggest retailers alongside SM Retail and Puregold Price Club. This exercise is seen riding on the robust consumer play given the bullish Philippine stock market and allow the Gokongweis to unlock values out of the retailing business.

The unit—with 27 years of retailing experience—operates department stores, supermarkets, hardware and home improvement outlets, appliance stores, fashion specialty stores and the toy store Toys R’ Us.

“If this pushes through, it will be a welcome addition to the sector where there are too little options to pick from and most names already trading at stretched valuations,” investment bank UBS Philippines said in a commentary Friday.

“In terms of size, Robinsons Retail is definitely one of the largest in the country. It operates 35 department stores, compared to SM’s 46. It has 73 supermarkets, compared to SM’s 156 total grocery store count and Puregold’s 171. Ministop operates 362 stores versus 7-Eleven’s 829,” UBS said. “The Gokongwei family earlier revealed plans to expand its retail business more aggressively.”

The Gokongwei group controls several other publicly listed Philippine companies—conglomerate JG Summit Holdings, food group Universal Robina Corp., property developer Robinsons Land Corp. and budget carrier Cebu Air.