Cemex wrapped up the institutional tranche of its Filipino subsidiary's Ps21.9 billion ($470 million) initial public offering on Wednesday, unfazed by the Brexit vote as it took a big step towards completing Manila's biggest industrial listing.
The institutional order book was already fully covered by cornerstone and anchor investors and in the end was multiple-times subscribed, predominately by long-only investors, sources familiar with the situation told FinanceAsia, as they prepared for the deal's official launch early last week.
With Rodrigo Duterte assuming office as the 16th president of the Philippines on Thursday, the remaining domestic offering will provide an immediate gauge of retail investor confidence in the new government's policies and the country's investment outlook.
Cemex Philippines, part of the Mexican building materials conglomerate, is scheduled to conduct the offering between July 4 and July 11, which will account for approximately 30% of the total transaction.
Final pricing for the 2.03 billion share deal was settled at Ps10.75 per share, which lies at the bottom half of the Ps10.5 to Ps12 indicative price range. At this level, the company will have a market capitalisation of $1.13 billion and will be valued at 10.4 times EV/Ebitda for the 2016 financial year.
The filler in Manila
As one fund manager said, the cornerstone investor line-up was impressive given that all of them are asset managers investing for value, rather than institutions buying shares out of business relationships.
The six cornerstone investors subscribing to 22% of the deal at the final price, for a total of $104 million, are Blackrock, Fullerton Fund Management Fund, Avanda Investment Management, Target Asset Management, Wellington Management, and AR Capital. They are not subject to any lock-up on the shares.
Roughly 80% of the final book, including the cornerstone and anchor investors, was allocated to long-only investors, underscoring the huge demand for industrial stocks in the Philippines given Duterte's promise to increase spending on infrastructure.
With no sizable industrial IPOs of note out of the country in recent years, Cemex Philippines also has some scarcity value.
Approximately 75 accounts were allocated shares in a fairly diverse book, according to a banker familiar with the situation, with Asia accounting for a big portion of the orders.
The banker noted decent demand from the US but said European orders were minimal, but then Cemex Philippines is one of three Asian IPOs that have built books through the dramatic Brexit vote on June 23.
Mexican parent Cemex will retain a 58.4% interest in Cemex Philippines after the IPO, which could fall to 55% if the stabilisation option of 305 million shares is exercised after trading begins on July 18.
Joint bookrunners of the transaction are Citigroup, HSBC and JP Morgan, while BDO Capital is a domestic underwriter.
