Pizza parlor chain operator Shakey’s Pizza Asia Ventures Inc. (SPAVI) has priced its initial public offering (IPO) at P11.26 per share, thus finalizing the size of its stock market debut at P3.96 billion.
A “reasonable balance” had been struck at this pricing level, at which the share sale is oversubscribed by three times the base offer due to demand from institutional investors, Stephen CuUnjieng told the Inquirer. CuUnjieng is chair for Asia at Evecore, which acts as SPAVI’s adviser for the sale.
The offer price was slashed from the earlier maximum price of P15.58 per share.
The final pricing will give Spavi a post-IPO market capitalization of P17.24 billion. Spavi is controlled by the Po family, which also leads Century Pacific Food Inc. (CPNF).
“What we wanted to achieve was fair pricing—fair to issuer and fair to buyers. We strove to do that in CPNF and we were fortunate enough to succeed and we’re trying to emulate it again,” CuUnjieng said.
The company will offer 104 primary common shares and 202 million secondary common shares, plus 46 million additional shares in case of excess demand.
Shakey’s is a foreign brand, but when the original owners—the Prieto family—acquired the rights, they arranged they would hold the trademark and the intellectual property.
“They don’t pay licensing fees so the margins are quite good,” CuUnjieng said.
At the same time, CuUnjieng said SPAVI’s management had delivered substantial growth and high revenue per location. Compared to the number of stores and the size of Shakey’s versus competitors, he said there was still space for substantial growth.
“It’s in a good sector that which remains upbeat because of improving economy,” said Manny Cruz, chief strategist at Asiasec Equities Inc. In the first nine months of the year, the economy has expanded by 7 percent year-on-year.
SPAVI’s stock debut coincides with the exodus of foreign funds from the local market and other emerging markets. “But long-term, it should be OK,” Cruz said.
At its current pricing of P11.26 per share, investors will pay around 20 times the earnings they expect to make from each share held in SPAVI in the year ahead. The offering will run from Dec. 2 to 8 while the listing is scheduled for Dec. 15. The company will trade under the ticker “PIZZA.” –Doris Dumlao-Abadilla