Maynilad considering a $300-M 'pre-IPO' investment round before it goes public in 2025

Bloomberg is reporting that Maynilad Water Services (MWS) [link], the “West Zone” water concessionaire owned by Metro Pacific Investments (MPI) and DMCI [DMC 10.70, down 0.9%], is “considering” raising a US $300 million (~P16.9 billion) “funding round” before it goes public on the PSE in 2025. The Bloomberg article quotes “people with knowledge of the matter” that MWS has selected HSBC Holdings to help sell no more than 10% of MWS’s equity at a valuation between $3 billion and $4 billion. MWS is required to sell at least 30% of its outstanding shares in an IPO as a condition of its water franchise agreement, and that transaction must happen by the end of 2026. The sources used for the article said that if the pre-IPO round goes ahead, MWS could reduce the size of the subsequent IPO needed to satisfy the legal requirement to sell 30% of its shares to the public. 

MB bottom-line: If Manny Pangilinan and the rest of the MPI ownership group believe that the market undervalues MPI’s investments, then the logic to delist MPI before this blockbuster transaction is sound. The pre-IPO round would push a nice chunk of shares into public hands in a process that MPI could run outside of the public eye, and then be required to sell fewer shares through the actual PSE IPO (where it believes it is improperly valued) to satisfy its franchise requirement. Still, it’s early yet, and a lot can change. Market conditions be like that.

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