GT Capital sets IPO at P455 per share for up to P21.6B

MANILA, Philippines—Taipan George Ty’s GT Capital Holdings decided on Tuesday to sell shares to the public at P455 per share, pricing the Philippines’ first initial public offering for 2012 at the middle of the targeted price range, for a stock market debut worth up to P21.6 billion.

The IPO – which has been warmly received by the overseas market – was priced at 13 times the amount of profits that the diversified conglomerate is expected to make this 2012, a valuation which many stock analysts deem as an attractive proposition.

After a six-city international roadshow, the offering was oversubscribed by over five times the offering size even at the high end of the P415 to P470 pricing range, GT Capital president Carmelo Bautista said in a press statement.

“Despite the strong demand, we decided not to price at the top of the range, to leave investors with room for upside. Other than the overwhelming interest in GT Capital, this landmark transaction really highlights the new vote of confidence in the Philippine investment story among global investors,” GT Capital vice chair Alfred Ty said.

The primary component of the offering – one of the largest in the local bourse – translates to P15 billion while the secondary tranche was P6.6 billion, inclusive of a P2.8 billion overallotment option.

Half of the order book was filled by investors from Asia while a quarter each was contributed by investors from the United States and Europe. There are about 100 offshore investors participating in the deal.

“This transaction will be remembered as one of the greatest IPOs ever done in the Philippines,” said Lauro Baja, managing director at UBS Philippines which is the lead global arranger for this issuance. Up to 70 percent of the IPO size can be sold to offshore investors but the Tys may decide to increase the domestic portion, Baja said.

“The exceptional response to GT’s IPO is a tribute to the Ty family its management team and the strong businesses they have developed throughout these years,” Baja added.

GT Capital is offering up to 41.217 million firm shares and an over-allotment option of 6.18 million shares.  The domestic offering will run for April 10 to 16 while the listing is targeted for April 20.  The sole local domestic coordinator and bookrunner is First Metro Investment Corp.

“I think GT is a good buy. Portfolio is diversified. I like their exposure in the Visayas grid (through Global Business Power). They are one of the biggest there. It’s a good consumer play too with Toyota,” Bernard Avinante, assistant vice president for research at Wealth Securities.

Avinante added that GT could be a potential member of the roster of blue chips under the main-share Philippine Stock Exchange index.

“It’s a buy because the company has strength and a leader across different market leading businesses such as banking real estate power generation and automotive,” said Manny Cruz, chief strategist at Asiasec Equities.

Being touted as a proxy to the Philippine economic growth story, GT Capital has interests in banking (Metropolitan Bank and Trust Co.), power (Global Business Power), real estate (Federal Land Inc.), automotive (Toyota Motor Philippines) and insurance (Phil AXA Life Insurance Corp.).