As wild swings rile stock market, computer retailer downsizes IPO
MANILA, Philippines – The country’s biggest retailer of computers and IT equipment marked down its planned initial public offering (IPO) by 70 percent to P1.65 billion as risk aversion roared back amid banking contagion fears in the United States.
Upson International Corp., the operator of mall-based electronics stores such as Octagon Computer Superstore and Gadget King, slashed the IPO offer price by 56 percent to P2.40 per share from as much as P5.50 each, a regulatory filing showed.
It also reduced the number of offer shares by 30 percent, notably removing a large portion of “secondary shares” being sold by its principal shareholder and company chair Lawrence Lee while downsizing the primary offer that was meant to finance expansion.
Upson, founded by entrepreneurs Ricardo Lee and William Lim as personal computers became an accessible consumer product in the 1990s, earlier said the IPO offer period will run from March 21 to March 27 this year.
It plans to make its Philippine Stock Exchange (PSE) trading debut under the stock symbol “UPSON” on April 3 this year.
It was among the IPOs that were delayed in 2022 due to volatile market conditions. It rescheduled the IPO to March 16 this year but the date was pushed back by two weeks.
A market analyst, who requested anonymity, said the price cut was likely due to lower than expected demand for the offer and relatively cheap valuations for other retail-focused companies on the PSE.
The analyst said that as a well-established firm, Upson was already seen as a mature player, thus “growth is not so exciting.”
The listing also comes at a volatile period as the PSE index erased gains for the year after a strong rally in January.
In the filing, Upson said it was selling 625 million primary common shares, which would raise a gross amount of P1.5 billion for its expansion and the opening of new branches.
It earlier planned to raise as much as P1.9 billion from the primary sale to open as many as 250 stores by 2027, doubling its current network.
In the revised offer, Upson will also sell up to 62.5 million secondary common shares owned by Lawrence Lee.
Data from third party research outlet Center for Research and Communication showed Upson was the country’s biggest consumer electronics retailer in 2020 in terms of store count and revenue.
The company began as a distributor of Logitech and Canon products before the Asian Financial Crisis in 1997 forced it to revamp its business model and enter the retailing segment.
Its stores today have a nationwide footprint and are located in the country’s top shopping malls.
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