on hand for future acquisitions or
repayment of borrowings.
Books opens on October 19 and close on
October 22. The pricing will be decided
between October 23 and October 25.
Daiwa, Mizuho and Nomura are joint
bookrunners.
MACAU
STUDIO CITY UP 24% ON DEBUTShares of STUDIO CITY INTERNATIONAL, the Macau
gaming resort of Lawrence Ho’s Melco
Resorts & Entertainment, closed at US$15.50
on their NYSE debut last Thursday, 24%
above the offer price.
The stock was priced at US$12.50, at the
top of an indicative price range of US$10.50–
$12.50 in the US$359m IPO.
Only 1.6m ADS of the 28.75m shares sold
changed hands during the opening session.
The IPO price represented a 2019 forecast
EV/Ebitda of 6.7. The likely local points of
comparison were Las Vegas Sands and
Wynn Resorts, which were respectively
trading at 9.8 and 8.7.
Nearly 89% of the deal was backed by two
existing shareholders, namely MCE Cotai
Investments, a subsidiary under Melco
Resorts, for 15.33m ADS, as well as New
Cotai for 10.22m ADS.
Prior to the IPO, Melco Resorts owned 60%
of Studio City. New Cotai, a US joint venture of
Silver Point and Oaktree Capital, controlled
the remaining 40%. There is a 15% greenshoe.
Credit Suisse, Deutsche Bank and Morgan
Stanley were the joint bookrunners.
Proceeds will be used for debt repayment.PHILIPPINES
PHILIPPINE SAVINGS BANK PLANS
RIGHTS ISSUEPHILIPPINE SAVINGS BANK is planning a Ps8bn
(US$148m) rights issue.
The bank intends to sell 184.7m shares.
The timing, entitlement ratio and price will
be announced later.First Metro Investment is the issue manager.
Earlier this year, Metropolitan Bank &
Trust, Bank of the Philippine Islands and
Rizal Commercial Banking raised Ps60bn,
Ps50bn and Ps15bn through their respective
rights offers.SOUTH KOREA
LOTTE TOUR FUNDS DREAM TOWERLOTTE TOUR DEVELOPMENT has raised W215.8bn
(US$190.3m) from a rights offering to fund
the development of the Jeju Dream Tower
resort complex.
The KRX-listed travel agency issued
18.6m shares to existing shareholders at
W11,600 per share, representing a 24.7%
discount to the pre-deal close of W15,400
on October 10.
The deal was 106.2% subscribed. Foreign
investors from the US and Hong Kong as
well as existing shareholders such as KB
Asset Management vied to participate in the
offering, according to the company.Malaysian investors play chicken
ASIA-PACIFIC QSR, Leong Hup bet on local appetite to revive IPO pipelineThe Malaysian franchisee of KFC and one of
South-East Asia’s largest poultry producers are
targeting IPOs at local institutions early next
year, aware that foreign investors might chicken
out in the current volatile market environment.
QSR BRANDS, Malaysia’s largest fast-food
operator, has filed the draft prospectus for
an IPO of up to US$500m, while poultry
breeder and livestock feed producer LEONG HUP
INTERNATIONAL is aiming for a US$600m float.
The first major listings to emerge since Malaysia’s
new government took power in the May election
would also be the biggest on the Kuala Lumpur
Stock Exchange since Lotte Chemical Titan
Holding’s M$3.77bn (US$906m) listing in July 2017.
Uncertainty, however, remains rife and may
deter foreign buyers. “Investors are still unsure
about the medium-term economic policies of
the new government. Moreover, Malaysia can’t
escape the current disinterest in emerging
markets,” an ECM banker said.
Bankers said the new government’s first
budget in early November would be crucial in
sending the right signals to investors.
QSR originally planned to go public last year
but held off because of weak markets. Leong
Hup had earlier eyed a launch in the fourth
quarter of this year.
Bankers on the deals said local funds are
keeping large defensive cash positions, but are
not averse to buying quality names.In addition, both issuers could attract
investors from the rest of Asia because of their
large regional presence, a banker working on the
Leong Hup IPO said.
“There is scarcity value in Malaysia and any
good investment window will not be wasted,” a
banker on the QSR transaction said.
QSR is the sole KFC franchisee in Malaysia,
Singapore, Brunei and Cambodia. Leong Hup
has operations in Malaysia, Indonesia, Vietnam,
Singapore and the Philippines.
If the two IPOs do well, they could help rekindle
the very quiet local IPO market, bankers say.
ECM activity has been muted. As of October
10, year-to-date ECM volume in Malaysia was
US$1.42bn against US$4.6bn in the whole of
2017, according to Refinitiv data. The country’s
largest IPO this year was that of chipmaking
equipment manufacturer Mi Equipment
Holdings for M$190m.THIN PIPELINE
EDOTCO, the tower subsidiary of local telecoms
major Axiata, has put its US$500m–$1bn IPO
on hold after the planned acquisition of assets in
Pakistan fell through.
The expected stake sales from foreign insurers
have not yet started, although the original
deadline for them to reduce their holding in
local units to 70% passed in June. Following
the change of government in May, marketparticipants are expecting the central bank to
go slow on the implementation of the stake
adjustments.
AIA, Prudential and Great Eastern have been
looking at either a trade sale or a listing for their
Malaysian units. Tokio Marine Holdings is also
expected to raise US$100m through an IPO.
QSR plans to sell 1.47bn shares, or 35% of
the share capital. The institutional tranche will
comprise 1.30bn shares and retail 167m.
The company had revenues of M$4.56bn in
2017 versus M$4.24bn in 2016. Net profit rose to
M$184m from M$127m.
Citigroup, Credit Suisse, Maybank and RHB are
the global coordinators and bookrunners with Affin
Hwang, AmInvestment Bank, CIMB and CLSA.
Leong Hup’s IPO comprises the sale of 1bn
secondary shares and 600m primary shares.
Institutions will be sold 1.50bn shares and retail
105m shares.
The founding Lau family and investor
Clarinden Investments are the vendors of the
secondary shares. Clarinden is owned by private
investor Affinity Equity Partners.
The company had revenues of M$5.5bn in 2017
versus M$5.3bn in 2016. Net profit fell to M$247m
from M$270m on higher operating costs.
Credit Suisse, Maybank and RHB are joint
global coordinators, and bookrunners with
AmInvest, DBS, Hong Leong, HSBC and OCBC.
S Anuradha