Swiss investment house UBS has bought some P693 million worth of shares of Villar family-led home improvement retailer AllHome Corp. in the first week of its local stock trading debut.
This is in line with the role of UBS as stabilization agent for AllHome’s initial public offering (IPO).
In a disclosure to the Philippine Stock Exchange on Tuesday, AllHome said UBS AG Singapore had purchased around 60.436 million of its shares at an average price of P11.4670 a share for stabilization purposes for the week ending Oct. 11.
Although the international tranche of the P14.83-billion offering was oversubscribed by three times the offer, shares hardly rose from the IPO price of P11.50 per share since listing on Oct. 10. During the first week of listing, AllHome shares traded between a high of P11.72 and a low of P11.42 per share, closing on Oct. 14 at P11.56 per share.
UBS AG Singapore, the stabilizing agent, acted as sole global coordinator and joint bookrunner during the IPO, the largest seen in the Philippine Stock Exchange since October 2016.
The stabilization of share prices allows an issuer to start on the right foot as a public company. To guard against the risk of falling prices post-IPO, the issuer grants the underwriters a “greenshoe” option, otherwise known as an overallotment option, that allows the underwriters to sell more shares than initially offered by the company. If share price falters, the underwriter can stabilize by buying back those shares.
Founded only in 2013, AllHome was the fastest start-up enterprise to go public and reach close to a “unicorn” or $1-billion valuation. The company is now valued by the stock market at around P43 billion.
All Home sold 750 million new common shares along with 375 million secondary shares held by its principal shareholder AllValue Holdings Corp., which had the option to offer 168.75 million more.
For the year 2018, AllHome chalked up P511.4 million in net profit out of P7.19 billion in revenues. In the six-month period ending June, AllHome’s net profit rose by 293.3 percent year-on-year to P434.3 million while revenues improved by 66.9 percent to P5.05 billion, based on its latest prospectus.
AllHome is a “one-stop shop” home improvement retailer which operates 25 stores with a total net selling space of 196,327 square meters across 20 cities and municipalities as of end-June. It plans to open up to 20 new stores this second half of 2019. For 2020, the plan is to open up to 25 new stores. —DORIS DUMLAO-ABADILLA