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Robinsons Retail to Raise Up to $650 Million in Initial Sale

Robinsons Retail Holdings Inc., controlled by Philippine billionaire John Gokongwei, plans to raise as much as $650 million in the nation’s biggest initial public offering this year, according to a sale arranger.

The operator of supermarkets and department stores in the nation priced the shares at 58 pesos each, Lauro Baja, head of UBS AG’s Philippine unit, one of the IPO arrangers, said in a mobile-phone message today. The amount to be raised includes an overallotment option of as many as 22.85 million shares, or about 1.33 billion pesos ($31 million), according to Baja.

Robinsons Retail, the Philippine franchise owner of Toys R Us Inc. and Ministop Co., completed the country’s largest initial share sale of 2013 after cutting its offer price range to 55 pesos to 66 pesos, from a maximum of 86.64 pesos. The Quezon City-based company’s IPO topped the $411 million sale by Travellers International Hotel Group Inc. this month, according to data compiled by Bloomberg.

The international tranche was “4.5x oversubscribed,” Baja said in his text message. Long-term investors accounted for 67 percent, and hedge funds and private banks the rest. About 58 percent of the investors were from Asia, he said.

The domestic offer period runs from Oct. 29 to Nov. 5, and the shares are scheduled to begin trading Nov. 11, according to a company filing.

At the IPO price, Robinsons Retail shares are valued at 22 times estimated 2014 earnings, Bach Johann Sebastian, a senior vice president at the company, said in a text message.

Store Expansion

About 86 percent of the proceeds will be used to expand the company’s store network, while the rest is mainly for loan repayment and renovations at its outlets, Robinsons Retail said in its prospectus. The company plans to have 1,400 stores by the end of next year, compared with 940 as of June 30, Chief Finance Officer Diosdado Zapata said Oct. 14.

Travellers, a venture of Genting Hong Kong Ltd. and Alliance Global Group Inc., reduced the maximum price of its offering by almost half after the Philippine Stock Exchange Index fell from a record high reached in May. The benchmark is still up 14 percent from the start of the year.

Share sales in the Philippines will total less than 200 billion pesos this year, Philippine Stock Exchange President Hans Sicat said Oct. 17. Companies are opting to pare the size of offerings amid speculation that a tapering in U.S. stimulus measures will curb demand for risky assets including emerging-market stocks, Sicat previously said.

Before Robinsons Retail’s offering, companies had raised $702.8 million, or 30 billion pesos, through IPOs in the Philippines in 2013, data compiled by Bloomberg show.

Deutsche Bank AG and JPMorgan Chase & Co. are also the global coordinators for the IPO, in addition to UBS. Maybank ATR Kim Eng Financial Corp. is the domestic lead underwriter.

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