E-Malt.com News article: Philippines: San Miguel shrunk the price range for its domestic beer unit's IPO by 29%

Southeast Asian food and drinks group San Miguel has shrunk the price range for its domestic beer unit's IPO by 29 percent, the second cut in as many months, after large investors complained it was too pricy, a source familiar with the listing said, according to Reuters, April 11.

"It's due to feedback from pre-marketing," said the source, which was briefed on the price range but declined to be identified due to local securities regulations.

He said the new price range of 8.0-11.0 pesos a share compared to 8.0-15.40 pesos a share as listed in the preliminary prospectus and was agreed on Thursday. The IPO is scheduled for May 12.

At the top of the new range, the San Miguel Brewery listing would raise a maximum of $409 million, down from around $606 million based on an original price range of 9.50-16.30 pesos a share, which was cut in March due to turbulent market conditions.

No one from San Miguel, headquartered in Manila, was immediately available to comment. The group, in which Japan's Kirin Holdings Co. Ltd. holds around 20 percent, kickstarts its domestic roadshow for the listing later on Friday.

At the top of the new range, the IPO values San Miguel Brewery, the company's flagship division, at around $4 billion, down from an original valuation of around $6 billion.

San Miguel is selling between 5 and 10 percent of San Miguel Brewery and most of the proceeds will be channeled into the parent group's planned move into heavy industry in the Philippines.

Some investors had previously expressed surprise that San Miguel was pushing ahead with the IPO, the only major one scheduled for this year, given continuing jittery about emerging market assets due to the global credit crunch and fears of a U.S. recession.

The local stock index .PSI has lost nearly 19 percent so far this year and in January, Cebu Pacific, the Philippines' top budget airline, shelved plans for a $309 million IPO.

San Miguel's A shares, open only to local investors, are down around 26 percent so far this year and its B shares, open to all, are around 24 percent weaker.

Both shares were flat on Friday at 43.5 pesos for the A stock and 45 pesos for the B shares in a market 0.3 percent weaker.

San Miguel, which is looking to diversify to reduce its reliance on a maturing local food and drinks market, plans a separate IPO for its regional packaging unit later this year.

Citigroup and ATR Kim-Eng Capital Partners are joint global coordinators for the brewery unit's listing. ATR Kim-Eng Capital and BDO Capital Investment Corp. will be joint domestic underwriters.


11 April, 2008