Puregold IPO priced at low end
Businessman Lucio Co-led Puregold Price Club Inc. has priced its initial public offering at P12.50 per share, hitting the lower end of the range as the country’s second largest retailer pursued its stock debut amid a cautious global market environment.
The IPO was priced at about 12.5 times the retailer’s expected earnings for this year. The earlier indicative price range was P12.50 to P16.50 per share.
“It was priced at the lower end to give upside [to investors],” said Eduardo Francisco, president of BDO Capital & Investment Corp. “Demand [is] good.”
“I think that the pricing at the low end is very attractive considering what’s happening in the local and global markets and this is a price that is really market-driven because the market was duly consulted and market feedback was processed intelligently,” First Metro Investment Corp. (FMIC) president Roberto Juanchito Dispo said in a separate interview.
BDO Capital and FMIC are the two domestic lead underwriters for the IPO while HSBC and UBS are the international lead managers.
This pricing suggests that the stock sale will be worth of at least P7.5 billion, which can be upsized to P8.62 billion if the overallotment option were exercised.
Puregold is selling 600 million common shares, 500 million of which will consist of primary shares and 100 million of secondary shares to be sold by the Co family. The overallotment option is up to 90 million shares in case of strong demand.
“The pricing seems a bit low considering it’s a fast-growing retailer. It’s priced like a giant mature retailer that’s growing as fast as the economy only. It’s still on expansion mode and should trade at a higher [price] multiple,” said Jose Mari Lacson, head of research at local stock brokerage Campos Lanuza & Co.—Doris C. Dumlao
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