SM Investments sets IPO price at P250 per share

SM Investments Corp., the investment holding company of retail tycoon Henry Sy, has set the price of its initial public offering (IPO) shares at P250 each to raise around P28.75 billion – the largest ever in the local bourse’s 70-year history.

In a disclosure to the Philippine Stock Exchange, SM Investments said it will offer to the public a total of 115 million shares, of which 105 million are primary or new shares.

The offering started yesterday and will run up to Thursday next week. Listing of shares is scheduled on March 22.

The company was earlier looking at a P270 to P300 per share price range but decided to lower this to attract more investors.

Sources said SM Investments may raise over $500 million from the offering of shares abroad.

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.

If SM Investments shares trade below the offer price, Macquarie may buy shares in the market and use those shares to cover the shares that have been over-allocated to investors.

SM Investments is the second company to go public this year next to the Ayala-controlled water utility firm Manila Water Co. Inc.

SM Investments holds Sy’s interests in tourism, department store operations, financial services, and real estate development.

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.

SM Investments 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 Dec. 2004, SM Investments 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.

The Sy family owns and operates 19 SM malls nationwide and expects to open two or three more each year through 2008. The group has also invaded the booming China market with a mall in Xiamen, and it is opening two more malls in the mainland over the next two years.