Sell-down in PTT Chemical sets new record for Thailand

Siam Cement has sold a 15.6% stake in PTT Chemical, raising Bt33.04 billion ($1.1 billion) in the largest block trade in Thailand ever. The deal, which was launched at about 11pm Hong Kong time on Tuesday and completed before the Thai market opened yesterday, is more than four times the size of the country’s second largest overnight placement– a $223 million sell-down in Ratchaburi Electricity Generating Holdings, which was completed in November.

The sale is also massive when considering that the inflow of foreign capital into the Thai equity market this year is only about $1.8 billion. According to sources, about 82% of the demand for PTTCH came from international investors and the allocation was not too different from that.

The strong demand allowed the deal to be upsized by 16% to 236 million shares from 204 million at launch, which meant the deal accounted for about 20 days worth of trading and some 75% of the free-float. The shares were offered at a price between Bt140 and Bt146 and priced at the bottom for a 9.1% discount versus Wednesday’s close of Bt154.

The low-end pricing was partly a function of the increased deal size, but likely also reflected the fact that the share price has more than doubled this year and was trading only about 5% below its 52-week high prior to the deal. However, 9% isn’t exactly excessive for a transaction this size. The earlier mentioned Ratchaburi block came at a 10.2% discount. According to a source, anchor demand from high-quality investors in the US had also been signed up based on a Bt140 price.