Puregold sets IPO price at P12.50-P16.50/share

MANILA, Philippines - Filipino-Chinese businessman Lucio Co’s supermarket chain Puregold Price Club has set the price range of its planned initial public offering (IPO) at P12.50 to P16.50 per share.

The company was earlier looking to sell its shares at a maximum price of P18 each.

With the new price range, Puregold is expected to raise between P7.5 billion and P9.9 billion, excluding the greenshoe or over allotment option, proceeds of which may then reach up to P8.62 bllion and P11.38 billion.

It has an option to sell another 90 million shares in case of strong demand.

Puregold, which operates 77 grocery stores across the country as of end-August this year, plans to sell up to 500 million new shares through a primary offering and 100 million existing shares held by majority shareholders.

The offer accounts for 34.5 percent of the company’s issued and outstanding capital stock after the IPO.

The domestic offering will kick off on Sept. 23 and run until Sept. 29 while the listing of the shares has been set on Oct. 5.

HSBC and UBS AG were tapped as international lead managers for the issue while BDO Capital & Investment Corp. and First Metro Investment Corp. will serve as the domestic lead underwriters.

Evercore Partners, on the other hand, is Puregold’s financial adviser.

Of the estimated maximum proceeds, Puregold is expected to receive P9 billion while the selling shareholders will get P1.8 billion.

Puregold intends to use proceeds from the offering to fund new store openings and settle loan obligations to China Banking Corp., Metrobank and Banco De Oro.

Up to 420 million shares will be offered overseas while the remaining 180 million shares will be sold to domestic investors.

Puregold would have a market capitalization of P36 billion once listed on the exchange.

Puregold is the second largest retailer among hypermarkets and supermarkets. 

From only one store in 1998, it has grown to 72 in 20 cities and 22 municipalities throughout Metro Manila and the main island of Luzon as of July 22, 2011.