Travellers investors warmly receive IPO

The initial public offering by Resorts World Manila developer Travellers International Hotel Group Inc., worth as much as $497 million, has been warmly received by offshore investors.

Days after the bookbuilding started on Tuesday, the order book is reported to be oversubscribed.

The Asian leg of the international roadshow started on Monday in Kuala Lumpur, followed by briefings in Singapore and Hong Kong. Next week, a team from Travellers will head to Boston, New York and London, where the pricing will be finalized.

Travellers has kept the indicative price range at between P10.65 and P11.88 a share, bringing the company’s offer size to P19.17 to P21.38 billion. This includes the overallotment option or the additional shares that a stabilizing agent can take up in case of strong demand.

Without the overallotment option, the base offer may range from P16.75 to P18.7 billion.

“It’s doing very well,” a source privy to the offering on Thursday said. “Basically, we opened the books on Tuesday and the international tranche is fully subscribed. The order book right now for the international tranche is two times oversubscribed … It’s only day two (of book-building.)”

In terms of price to earnings multiple, the source said the offer price range of P10.65 to P11.88 a share was “roughly in line with current valuations” in the local stock market. The source said it is still too early to say whether the issue will be priced at the high or low end of the indicative range.

About 70 percent of the issuance is meant for the overseas market while 30 percent is earmarked for domestic investors. Other sources affirmed a strong appetite for Travellers’ stock debut.

Travellers, a partnership between tycoon Andrew Tan’s Alliance Global Group Inc. and the Genting group of Malaysia, has deployed a team led by company president Kingson Sian and chair David Chua to brief international investors.

The source said Travellers’ biggest selling point is its commanding presence in the Philippine gaming sector and its business track record, as seen in its operation of Resorts World Manila.

“It has a partner, Genting, who’s a good operator. Basically, there’s proof of concept already,” the source explained.