Asian Pay TV Slumps to Become Year’s Worst IPO: Singapore Mover

Asian Pay Television Trust, owner of Taiwan’s third-largest cable television operator, slumped on its first day of trading in Singapore to become the world’s worst initial public offering this year on concern marginal earnings growth will limit its ability to sustain dividends.

The stock sank 5.2 percent to close at 92 Singapore cents, retreating from an intraday high of S$1.005. That makes the IPO the worst among companies that raised at least $1 billion worldwide, according to data compiled by Bloomberg. The benchmark Straits Time Index dropped 1.1 percent.

The trust, which owns Taiwan Broadband Communications Co., sold 1.44 billion shares at 97 Singapore cents each, raising S$1.39 billion ($1.1 billion) in its initial share sale. The stock offers a projected yield of 8.5 percent for 2014 based on the price for its IPO, according to its prospectus. That compares with the estimated dividend yield of 4.9 percent for StarHub Ltd. (STH), Singapore’s biggest cable TV operator, for the next 12 months, according to data compiled by Bloomberg.

“People don’t understand where the valuation is coming from,” said Jason Hughes, Singapore-based head of sales at CMC Markets. “Investors could be questioning what sort of growth can be expected going forward.”

Asian Pay Television expects revenue to increase to S$310.8 million this year and to S$323.8 million in 2014, according to the prospectus. That compares with S$308.7 million in 2012.

Macquarie International Infrastructure Fund sold its stake in Taiwan Broadband as part of its planned shutdown. The Singapore-listed fund, which owned 47.5 percent of Taiwan Broadband, said in April that it was seeking at least 40.8 Singapore cents per share from the sale.

Neuberger Berman

Asian Pay Television’s IPO is the second-biggest offering in the city-state this year after Mapletree Greater China Commercial Trust (MAGIC) raised $1.4 billion in February, according to data compiled by Bloomberg.

The shares were offered at a price of as much as S$1 and sold to investors including Neuberger Berman LLC and Quantum Partners LP, the prospectus shows. Taiwan Broadband, established in 1999, serves more than 750,000 cable TV households with over 150 channels, according to its website.

Newspaper publisher Singapore Press Holdings Ltd. (SPH) said this week it plans to raise about S$540 million from an IPO of a real estate investment trust, with a listing expected in early July. Overseas Union Enterprise Ltd. (OUE) said in March it’s in talks with banks to set up a REIT in the city-state. In Hong Kong, Langham Hospitality Investments, a trust backed by Great Eagle Holdings Ltd. (41) hotels, is scheduled to start trading tomorrow.

“The monetization of assets through REITs or trust structures may be difficult now because of a change in interest rate expectations towards higher rates,” Alan Richardson, a Hong Kong-based fund manager who helps oversee about $110 billion for Samsung Asset Management Co., said. “That theme appears to be coming to a close.”

Macquarie Group Ltd. and JPMorgan Chase & Co. were joint global coordinators for the offering, and DBS Group Holdings Ltd. and CIMB Group Holdings Bhd. also helped manage the IPO.

To contact the reporter on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net

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