Metro Retail IPO priced at P3.99/sh

METRO Retail Stores Group, the country’s fourth largest retailer, has priced its initial public offering at P3.99 per share, firming up the stock debut size at about P4.04 billion.

The IPO price was cut from an earlier maximum offer price of P6.10 per share. A market source privy to the offering said on Wednesday that at this pricing of P3.99 per share, investors will pay less than 15 times the kind of money Metro Retail will likely make in 2016.

“As part of the institutional book-building process, we have met with a significant number of institutional investors in Hong Kong, Singapore and Manila. We are pleased with the high level of interest in the offering and the subsequent participation from both domestic and institutional investors in the institutional tranche of our offer,” Metro Retail chief executive officer Frank Gaisano said in a letter to the Philippine Stock Exchange that announced the IPO pricing on Wednesday

“Given the recent market volatility, the positive outcome of the book-building was a welcome development. Upon receipt of the permit to sell from the Securities and Exchange Commission, we expect to begin receiving subscriptions for the IPO that can accelerate our expansion plans, as described in our prospectus,” Gaisano said.

The Securities and Exchange Commission and the Philippine Stock Exchange earlier authorized Metro Retail to sell up to 920 million in new common shares, bringing to public hands about 26.71 percent of outstanding shares. There is also an overallotment option of up to 92 million common shares.

The stock offering of Metro Retail – the biggest retailer in the Visayas and the fourth largest in the country – will run from Nov. 9 to 13. Listing date on the Philippine Stock Exchange is scheduled on Nov. 24.

Bulk of the proceeds from the primary offering will be used to fund capital expenditures for the establishment of new stores.  The remainder will be used to establish a consolidated logistics and distribution center in Cebu as well as for working capital requirements.

Mandated as joint global coordinators and lead underwriters are BPI Capital Corp. and Deutsche Bank AG Hong Kong branch.