D&L lowers price range for P5.9-B initial offer

MANILA, Philippines - D&L Industries has set the price range for its planned initial public offering (IPO) at P3.85 to P4.80 each share to raise up to P5.9 billion.

The company was originally looking to sell its shares at a maximum price of P5.85 which could have generated up to P7.2 billion in sales proceeds.

Alvin  Lao, executive vice-president and chief financial officer of D&L, said the company and its lead international and domestic underwriter decided to price it at the lower end of the indicative maximum offer price to give upside to investors.

“We want to leave some upside on the table for investors. Our underwriters know better than us.  I guess the price range somewhat tells us what the market is willing to pay,” Lao said.

The final offer price will be known on Nov. 26. The roadshow kicked off Thursday and will run until Nov.23.

The company is offering up to 1.07 billion common shares, representing 30 percent of its post-IPO outstanding capital. Its majority shareholder Jadel Holdings Co. has an option to sell up to 15 percent or 160.71 million shares to foreign investors in case of strong demand.

The offering will run from Nov. 28 to Dec. 6 while listing of the shares has been set on Dec. 12.

Roberto Benares, managing director at Maybank ATR Kim Eng Capital Partners, said D&L enjoys strong support from foreign investors given a consumer-driven Philippine economy.

“We did a pre-deal and it was positive.  Everybody wants to dip their hands into Asia, particularly in the Philippines because of its remarkable growth,” Benares said.

Through its various units, D&L produces variants of its products and focuses on designing innovative, customized and specialty product solutions for customers mostly in the food and plastic products businesses.

Among its high profile, long-term clients include San Miguel Corp., Jollibee Foods, Nestle, Pfizer, Golden Arches Development Corp., Petron, Suyen, Epson, Pacific Paint, Sumitomo Electric Wiring Systems and Yasaki.