Foreign investors snap up SM Investments IPO

SM Investments Corp.’s international share offering was oversubscribed as foreign investors from Asia, Europe and the United States snapped up the stocks of the company, which holds the investments of retail tycoon Henry Sy.

In a statement released yesterday, SM Investments said: "Strong response was generated from every city, with numerous orders of approximately $50 million or larger."

SM Investments attracted more than $2 billion in demand, with 35 percent coming from Asia, 31 percent from Europe, 31 percent from the United States, and three percent from other areas.

Top officials of SM Investments recently went on a roadshow in Hong Kong, Singapore, London, Paris, Edinburgh, Amsterdam, New York, Boston, Washington and San Francisco.

SM Investments offered a total of 115 million shares to the public at P250 per share. Subscriptions to the Philippines’ largest IPO, expected to raise P28.75 billion, closed yesterday. Listing of the shares has been set on March 22.

SM Investments holds controlling interests in Banco de Oro Universal Bank, shopping mall operator SM Prime Holdings Inc. and property developer Highlands Prime Inc. as well as minority stakes in food and beverage group San Miguel Corp. and conglomerate Ayala Corp. — all blue chip issues listed on the Philippine Stock Exchange.

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

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 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.

The Sys, acknowledged as the pioneer of megamalls, also want to diversify into commercial real estate and tourist resorts - sectors which they believe have significant opportunities for growth as the Philippines becomes a more attractive tourist destination.