SM Investments IPO price set at P230-P270/share

SM Investments Corp. (SMIC), the investment holding company of retail tycoon Henry Sy, has reduced the price range of its planned initial public offering (IPO) from P230 to P300 to P230 to P270 per share.

A company official said the decision to narrow down the IPO price range had nothing to do with demand, pointing out that the company’s international roadshow has been warmly welcomed by foreign investors.

Sources said SMIC could raise over $500 million from the offering of its shares abroad.

In an earlier filing with the Securities and Exchange Commission, SMIC said it will offer between 75 million and 140 million shares through the IPO which will kick off on March 11. The offer price will be fixed today, while listing of shares is scheduled on March 22.

Computed at the proposed maximum offer price, the IPO could gross P37.8 billion, more than twice the P18 billion proceeds oil refiner Petron Corp. raised in its maiden offering of shares in September 1994.

Proceeds from the IPO will be used largely for projects related to property development, tourism and leisure and the rest for the settlement of loans.

The Philippine Stock Exchange has already approved in principle SMIC‚ application for the listing of shares on the bourse’s main board.

Tapped as global coordinator and bookrunner for the issue is Macquarie Securities while BDO Capital & Investment Corp. will serve as lead manager for the domestic offer.

SMIC holds the Sy family’s interests in tourism, department store operations, financial services, and real estate development.

SMIC plans to develop mixed-use complexes in Cebu, Tagaytay, Baguio and Metro Manila, which include hotels, convention centers, shopping malls, leisure and entertainment facilities.

In the nine months ending December 2004, SMIC posted a net income of P3.91 billion on revenues of P42.17 billion. Its assets stood at P111.89 billion while stockholders’ equity was P35.27 billion.