(Source: The Philippine Star | November 7, 2015)
Leading homegrown retailer Metro Retail Stores Group, Inc. (MRSGI) reaches a major milestone with its initial public offering (IPO).
The IPO generated a high level of interest from – and subsequent participation of – domestic and international investors. “We have met with a lot of institutional investors in Hong Kong, Singapore, and Manila which showed a high level of interest in the offering,” shared MRSGI chairman and chief executive officer Frank S. Gaisano.
In line with this and in accordance with consultations with its underwriters, Metro has set the price of its IPO shares at P3.99 per share.
The pricing was determined to include high quality investors in the order book, reflects strong demand at that price level, and to give shareholders confidence in the current market conditions.
“Metro will issue 905.4 million primary shares raising P3,621.5 million because it raises enough capital needed to grow the business and provides a substantial float of 26.4 percent for the base deal size – up to 29.0 percent if the over-allotment option is exercised giving the shares a good base of liquidity post-IPO,” said Reginaldo Cariaso, chief operating officer of underwriter BPI Capital Corp. “We believe the P3.99 per share offers good value for investors in the IPO. While there is enough demand to issue the entire 920 million shares, it was decided for the principals to keep more of the shares.”
While the proceeds from Metro’s IPO are expected to accelerate the company’s expansion plans, Gaisano noted that going public is beyond just a financial objective. “It is a strategic transformational element that we want to pursue boldly, and provided it gives us a solid investor base, we would have achieved the corporate objectives and will be even more ready for growth,” said Gaisano. “We feel that it is more important to focus on protecting our market share, and on improving margins and operating efficiency. We are determined more than ever to be a leading, value-providing retailer and the IPO is just one of the strategies we employ.”
Metro, which is the retail arm of Cebu-based Vicsal Development Corporation, operates 45 multi-format stores in key areas in the Visayas, Central Luzon, National Capital Region, Calabarzon, and the Bicol region. According to a 2014 Euromonitor report, Metro is the largest department store and hypermarket operator in the Visayas, and the second-largest supermarket operator in terms of retail sales value.