The sale will boost the freefloat of the company to 30.8% from the present 13.3%, which û at least in theory - should make the stock more attractive to international investors and reduce the valuation discount. Prior to this sale Filinvest traded at about a 30% discount to net asset value.
The price represented a 5.8% discount to the 10-day volume-weighted average price, which compared with early indications that the deal would price at a discount of up to 8%. However, the share price did fall 4.7% during the two-week marketing period and the discount to FridayÆs (January 19) closing price of Ps1.62 was no more than 1.2%.
The stock has risen 25% in the past six weeks and is up 83% since the beginning of 2006.
The price was fixed after the 95% institutional tranche, which closed on Friday, attracted $900 million worth of demand or more than five times the size of the offering before adding the 15% greenshoe.
US investors were among the most keen on the stock, contributing about 40% of the demand, according to a source. Other investors included those from the Middle East and Australia.
ôI believe many investors feel they missed the boat on Megaworld and Robinsons Land and think this might be the last property developer to come to market in a while,ö says the source.
Megaworld and Robinsons Land both conducted similar share sales in April and October last year to boost the freefloat of their respective stocks. Since those sales, Megaworld has risen 70% while Robinsons Land has gained 27%.
Filinvest focuses on the development of residential housing for the ôaffordableö low-end of the market, where most of the construction of new housing is expected to take place in the future. Much of the remittances from Filipinos working abroad end up being invested in this type of real estate.
The company has also undergone a major restructuring over the past three months, which has included the injection of assets from its parent company. These acquisitions (of three separate assets) have given the company exposure to shopping malls and the business process outsourcing office market, which is seen to have further increased the attractiveness of the stock.
The share sale, which was arranged by UBS, comprised 5.4 billion shares, of which 3.7 billion were new. The remaining 1.7 billion shares were sold by Filinvest Alabang, which held a 26.6% stake prior to this transaction. There is also a greenshoe of 810 million shares that can increase the total deal size to 6.21 billion.
The 5% not already sold to institutional investors will be offered to Philippine retail investors in a separate sale between Monday and Friday this week. This sale will be led by ATR-Kim Eng Capital Partners.
Filinvest became the first Philippine company to raise funds in the international equity capital markets this year. However, one of the pre-IPO shareholders of First Gen Corp did sell $53 million worth of existing shares in that company through a placement on Thursday last week, making the independent power producer the first Philippine company see its stock change hands in an ECM transaction in 2007.
The First Gen placement comprised just under 47 million shares, or close to 6% of the company, which were sold at Ps55 apiece - at the bottom of the offered range of Ps55-56. The final price represented a 4.3% discount to ThursdayÆs closing price of Ps57.50, which is quite modest given that the sale accounted for 70-days trading volume in the First Gen stock, and 80% of the average daily trading volume on the entire Philippine stock exchange. The share price fell to $55.50 on Friday in the wake of the placement.
The sale, which was jointly arranged by CLSA and UBS, was said to have been just under two times covered and distributed to about 15 investors.
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