Casino Venture Travellers Reduces Maximum Price of IPO by 49%

Travellers International Hotel Group Inc., a venture of Genting Hong Kong Ltd. and Alliance Global Group Inc. in the Philippines, cut by almost half the maximum price of its initial public offering.

The price was reduced to 11.88 pesos a share from the 23.38 pesos announced on Oct. 1, Lauro Baja, head of UBS AG’s Philippine unit which is helping arrange the sale, told reporters in Manila today. The company’s initial share sale may raise $430 million, he said.

Travellers plans to sell as many as 1.57 billion primary shares and as many as 236 million stocks in over-allotment to fund its expansion plans, according to a stock exchange filing this week. About 70 percent of the shares will be sold overseas, the rest locally, it said on Oct. 1.

The Philippine Stock Exchange may miss its 200 billion-peso ($4.6 billion) share-sale target this year, as companies opt to scale down the size of their IPOs, President Hans Sicat said on Sept. 28. Alliance Global President Kingson Sian had said reducing the IPO price was a possibility.

“It’s still a buyer’s market because capital markets are still a bit thin,” Jomar Lacson, an analyst at brokerage Campos Lanuza & Co., said in a telephone interview. “They need to make sure the security is marketable in terms of price.”

Travellers’ initial share-sale price may increase to as much as $495 million with the over-allotment option, Baja said today. UBS together with BDO Capital & Investment Corp. and Maybank ATR Kim Eng Financial Corp. are acting as lead underwriters for the IPO.

“They need to make sure the shares are fully subscribed, otherwise the underwriters will have to buy the rest,” Lacson said, adding that Alliance Global may have to partly finance its expansion through debt.

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