GT Capital founder sells stock after 50% rise

Filipino business magnate George Ty sold partial stake in his flagship company after the stock reached an all-time high.
George Ty and his family has a net worth of $4.6 billion according to Forbes
George Ty and his family has a net worth of $4.6 billion according to Forbes

Filipino tycoon George Ty and his family raised Ps8 billion ($172 million) from the sale of shares in their flagship company GT Capital on Wednesday night, taking advantage of a big rally in the stock since the last time they sold shares.

Ty and some of his family sold 5.23 million shares in GT Capital, a diverse conglomerate he created as a holding vehicle for various assets in 2007. The sale in itself was not unusual — the family came to the market last February, and once in 2013 — but the sharp rally in the company’s stock meant Ty got a much better price than he did the last time he sold shares.

Sole bookrunner UBS helped the Ty family secure a price of Ps1,539 per share on Wednesday, a big jump from the Ps1,180 they settled on the last time they came to the market.

That difference was partly down to a rally in the broader Philippine market over the last 18 months. But GT has far outperformed most of its peers.

GT Capital’s stock has risen around 51.6% since the start of 2015, compared to a 10.3% jump in the value of the Philippine Stock Exchange index. The rally was helped earlier this week, when GT Capital reported a 62% year-on-year increase in net income to Ps9.1 billion. The profit increase was largely due to a one-time gain from the company’s sale of its power business to Metro Pacific Investments earlier this year.

Ty and his family sold their shares through holding company Grand Titan Capital shortly after the stock closed at an all-time high of Ps1,620 on Wednesday. According to a termsheet seen by FinanceAsia, a total of 5.23 million shares were pitched at an offer price range of Ps1,520 to P1,575 at launch before settling at Ps1,539 late Wednesday.

The deal was finalised at a 5% discount to the stock’s Wednesday close after being marketed at a 2.8% to 6.2% discount range.

Institutional investors showed a real interest in the stock, putting in orders multiple times the size of the deal, according to a source familiar with the situation. GT Capital shares closed 4% down on Thursday, although that was still slightly above the offer price.  

The Ty family continues to own a controlling 51.3% stake in GT Capital after trimming 3% of their interest through Wednesday’s share sale, the family’s third selldown of GT Capital shares after two separate sales in 2013 and 2015.

The strong reception for GT Capital’s share sale shows that investor confidence in the Philippines continues to strengthen after a sluggish year in 2015, partly due to an overhang from the presidential election held in May this year.

The benchmark PSE index has been rising steadily since the election of the outspoken Rodrigo Duterte as president in early May and is now 7.3% higher. Duterte’s bombastic style has generated critics, but so far, investors appear to be on his side.

The improving confidence since the beginning of the year has helped a number of equity deals cross the finishing line, including Cemex Philippines’ $470 million IPO and JG Summit’s $250 million follow-on offering.


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