Doosan Bobcat Cuts IPO to $872 Million in Revised Offering

Updated on
  • Price range slashed 34% to 29,000 won-33,000 won: filing
  • Number of shares reduced to 30 million from 49 million

Doosan Bobcat Inc., a unit of South Korea’s biggest construction equipment maker, cut the size of a proposed share offering by 60 percent to as much as 991 billion won ($872 million) and reduced the price to boost demand.

About 30 million shares owned by its shareholders, including Doosan Infracore Co. and Doosan Engine Co., will be sold at a price range of 29,000 won and 33,000 won, the company said in a regulatory filing Thursday. Listing is due Nov. 18. The company had earlier proposed to raise as much as 2.45 trillion won, selling 49 million shares at 41,000 won to 50,000 won apiece.

Doosan Bobcat withdrew its original offer, which would have been the country’s biggest IPO in more than six years, after failing to lure investor interest. The benchmark Kospi index has moved in a narrow band in the past five years, making investors wary of valuations of companies listing on the market. While the South Korean firm cut the size, TI Fluid Systems Ltd., the automotive company owned by Bain Capital, scrapped its planned London IPO Thursday amid weak reception for such deals.

The share sale by Doosan Bobcat will help raise as much as 450 billion won for the Doosan Group, according to the statement. The shares that the group units aren’t selling in the IPO could be used as a source of financing after Doosan Bobcat’s listing, Doosan Infracore said in an e-mail, without elaborating.

Doosan Infracore, the biggest shareholder of Doosan Bobcat, bought Ingersoll-Rand Co.’s Bobcat business and other equipment units in 2007 for $4.9 billion, the biggest overseas deal by a South Korean company. Doosan Bobcat posted 234.8 billion won in operating profit in the first half of this year and generated sales of 2.15 trillion won, the company said. Its operating margins widened to 10.92 percent in the first half, from 9.54 percent for 2015.