Century Food IPO price at P13.75/share

Leading food manufacturer Century Pacific Food Inc. (CNPF) on Monday finalized its initial public offering (IPO) at a price of P13.75 a share, which will allow the company to raise P3.16 billion in fresh funds for expansion.

The IPO price was set near the upper end of the indicative range of P12.50 to P14.50 for the IPO, the second local stock debut for 2014.

The final IPO price was disclosed by CNPF president Christopher Po in a letter to the Philippine Stock Exchange.

BDO Capital and Investment Corp., BPI Capital and First Metro Investment Corp. are the underwriters of the IPO.

About 229.65 million common shares will be sold by the company to the public through the PSE. The offering will run from April 23 to 29 while listing will take place on May 6.

Market sources estimated the final IPO price at a 2014 price-to-earnings (P/E) multiple of around 20x, a discount to the valuation of comparable peers like Universal Robina Corp., which is trading at 29x P/E.

A P/E 2014 ratio of 20x means investors will pay 20 times the amount of money that CNPF will likely make this year.

Stockbrokerage DA Market said average valuation for stocks comparable to CNPF was at 22.9x P/E for 2014. Excluding low P/E stocks like Pepsi Cola Products Philippines Inc. and San Miguel PureFoods, DA Market said industry average P/E was higher at 27.8x.

Apart from flagship Century Tuna, the company produces canned food under the brands 555 for sardines and tuna, Argentina and Swift for canned meat and Angel and Birch Tree for canned and powdered milk.

Founded by businessman Richard Po Sr. 35 years ago, CNPF is a leading branded food company primarily engaged in the development, processing, marketing and distribution of processed fish and meat in the Philippines. Doris C. Dumlao