The Philippines’ leading dining chain operator, Max’s Group Inc., has priced its follow-on offering at P17.75 per share, allowing the company to raise P3.5 billion from the sale of primary shares to the public.
The price per share of P17.75 is about 20 times the likely earnings of the company for 2015, Max’s chief finance officer Dave Fuentebella said in an interview on Thursday.
The offering was priced below the maximum offer of P21.75 per share and carved out the portion consisting of secondary shares. Based on these final terms, about 30 to 35 percent of company shares would be held by the public after the offering.
“For now… all the fund raising will go straight to the company,” Fuentebella said, explaining the exclusion of secondary shares in this offering. This capital-raising exercise, he said, would be the Max’s group’s “springboard” to future growth.
Another listed restaurant group, Jollibee Foods Corp. is now trading at over 30 times the likely earnings. Fuentebella said Max’s offering was priced as such to “give some upside to investors.”
Max’s has authority to sell up to 34.1 million new shares plus 204.64 million group shares currently held by subsidiaries plus about 61.39 million secondary shares inclusive of 27.28 million in overallotment.
Fuentebella said Max’s had applied for authority to sell secondary shares held by principal shareholders only to be able to have a leeway to do so. In the future, he said these secondary shares could be offered through a private placement. It is also an option “not to sell them at all,” he said.
Max’s follow-on offering will begin on Dec. 1 and will run through through Dec. 5. The new shares sold to the public will be listed. Trading of the shares on the Philippine Stock Exchange Inc. will start on Dec. 12.
BPI Capital Corp. is the mandated bookrunner, issue manager and lead underwriter for the transaction. BDO Capital Corp. serves as senior co-lead underwriter.
Of the gross proceeds of P3.5 billion, P3 billion will be used to reduce debt obligations incurred in the acquisition of Pancake House. The balance will be used to expand the current store network and fund capital expenditure.
In its disclosure, the company said it had determined the size of the offer as “the most optimal for both the company and for investors, even as it does not include secondary shares held by existing shareholders who are not selling into the offer at this time.”
“We are excited to come to the Philippine equity capital market in a transaction that allows investors the ability to participate in the growth of a uniquely positioned and integrated restaurant business at this time. Doris c. Dumlao