Travellers Int’l cuts planned IPO price by half

MANILA, Philippines - Resorts World Manila owner Travellers International Hotel Group Inc. has cut by half the maximum offer price for its initial public offering (IPO) this month.

The recent price guidance pared down the highest amount Travellers Group can raise from the stock market to P21 billion.

During the company’s domestic roadshow, Lauro C. Baja III, managing director of underwriter UBS Investments Philippines Inc., said the hotel and casino firm pegged the maximum offer price at P11.84 per share, substantially down from P23.38 apiece.

“The max price for the share is P11.88 per share. That translates into proceeds of $431 million before the greenshoe (overallotment option) and $495 million post-greenshoe,” Baja said.

“Post-IPO market capitalization of the company is $4.3 billion at the maximum valuation,” Baja said.

Travellers Group plans to sell as much as 1.573 billion primary shares and another 235.98 million shares under an over-allot option to cater to robust demand.

“The IPO for Travellers Group will be definitely beneficial to the company. This will make our management team directly accountable to a new set of shareholders,” said Travellers Group chairman Andrew L. Tan.

Prior to the period of market volatility in May to July, Travellers Group targeted to sell shares at a maximum price of P23.38 per share.

The selling price will be finalized on Oct. 17, which will be followed by a domestic offering on Oct. 22-29. Listing date and start of trading in the Philippine Stock Exchange (PSE) is scheduled on Nov. 5, Travellers Group said.

Early in July, Travellers Group decided to postpone its IPO given market volatility. Since hitting the 31st all-time high this year at 7,392.20 on May 15, the benchmark PSE index has slipped to 6,390.48 as of yesterday on the back of numerous overseas concerns.

“The company intends to use the proceeds of the primary offer for general corporate purposes,  including, but not limited to, financing capital and project expenditures for its Phase 2 and Phase 3 expansion plans as well as equipment leases and purchases,” Travellers Group said.

Travellers Group, a joint venture of the world’s third-largest cruise line operator Genting Hong Kong and local conglomerate Alliance Global Group Inc., will spend around $600 million as it pursues Phase 2 and 3 of Resorts World Manila.

Specifically, the hotel and casino operator will complete the 5,000-seat convention center with function rooms in 2014, the Marriott Hotel expansion in 2015, and new hotels Hilton and Sheraton in 2016.

Phase 2 and 3 will allow Travellers Group to increase retail space by 60 percent and add 1,100 rooms to the existing 1,226 rooms in Resorts World Manila’s hotels Maxim’s, Marriott and Remington.

To date, gaming facilities in the 12-hectare Resorts World Manila is composed of 300 tables and more than 1,800 slot machines.

For the IPO, Travellers Group said it hired CIMB Securities (Singapore), Maybank Kim Eng Securities (Singapore), Merrill Lynch (Singapore), Religare Capital Markets Hong Kong and UBS AG as the joint global coordinators.

Joint international co-bookrunners are CLSA Ltd., Credit Suisse (Singapore) and Morgan Stanley & Co. International while domestic lead underwriters are BDO Capital & Investment Corp., Maybank ATR Kim Eng Capital Partners and UBS Investments Philippines.

Aside from Resorts World Manila, Travellers Group is also the company behind the $1.1-billion Resorts World Bayshore that will be opened in 2017 at the earliest.

The new casino complex is located in the Entertainment City, a 120-hectare property reclaimed from Manila Bay. Pagcor Entertainment City is the Philippines’ answer to Las Vegas, Singapore and Macau gaming hubs.