Travellers Int’l pegs IPO price at P11.28/share

MANILA, Philippines - Travellers International Hotel Group Inc., the operator of Resorts World Manila, has finalized the selling price for its initial public offering (IPO) at P11.28 per share following the bookbuilding process and international roadshows, scaling down its estimated proceeds to P20.4 billion.

“Although there was demand at the top, Travellers Group decided to price at the mid-point to ensure aftermarket support,” said Lauro C. Baja III, managing director of underwriter UBS Investments Philippines Inc.

The final selling price is well within the P10.65-P11.88 guidance but is a hefty discount to the initial maximum selling price. 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 that will allow the company to raise as much as P42.29 billion.

“The international tranche was five times oversubscribed with over 100 investors,” Baja said, adding that the offer price pegs the market capitalization of Travellers Group at $4.2 billion.

Travellers Group will sell 1.573 billion primary shares and another 235.98 million shares through an over-allotment option. Offer period is on Oct. 22-29, while the listing and start of trading at the Philippine Stock Exchange is scheduled on Nov. 5.

Baja said 60 percent of Travellers Group’s investors are long-term and sovereign wealth funds while the remainder is split between hedge funds and private banks.

Geographically, 70 percent of the investors are from Asia, 20 percent from Europe and 10 percent from the US, he said.

Travellers Group, a joint venture between the world’s third-largest cruise line operator Genting Hong Kong and local conglomerate Alliance Global Group Inc., of tycoon Andrew Tan, will spend around $600 million as it pursues Phase 2 and 3 development 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 Maxim’s, Marriott and Remington hotels.                           

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