Confidence in IGB REIT (1597)

Tight price range for institutional tranche of IPO is good indication
KUALA
LUMPUR: IGB Real Estate Investment Trust has set a tight price range
for the institutional tranche of its up to US$266mil (RM823mil) initial
public offering (IPO), according to a term sheet seen by Reuters, indicating confidence in demand for the offer.
The
IPO, potentially the fourth largest in the South-East Asian country
this year, will be offered to institutions at a price range of RM1.15
to RM1.25 per unit, the term sheet showed. IGB REIT launched its retail
offer on Monday at a maximum price of RM1.25 per unit.
A wide
indicative price range for an IPO would show that the sponsors are
testing the strength of demand for the offering, while a narrow range
shows they are reasonably certain about the take-up.
The unit of property firm IGB Corp Bhd
is offering up to 670 million units in the IPO, comprising 469 million
units for sale to institutional investors and another 201 million to
employees and the public. Listing is set for Sept 21.
The
bookbuilding range translates to a forecast 2013 yield of 5.4% to 5.8%,
according to the term sheet. The book opened yesterday and closes no
later than Sept 6.
Based on the top end of the IPO price, IGB
REIT would have a post-IPO market capitalisation of RM4.25bil, the
largest in Malaysia ahead of Pavilion Real Estate Investment Trust's
RM4.05bil.
The property trust, which owns two Kuala Lumpur
shopping malls the Mid Valley Megamall and the Gardens Mall expects to
use the IPO proceeds for future expansion.
It has hired CIMB Investment Bank and Hong Leong Investment Bank as the principal advisers and joint managing underwriters for the IPO.
CIMB, Credit Suisse and Hong Leong are the joint global coordinators, while CIMB, Citigroup, Credit Suisse, DBS, Deutsche Bank, Goldman Sachs, Hong Leong, HSBC, JPMorgan and Maybank are the joint book runners. Joint underwriters are AmInvestment, CIMB, Hong Leong and Maybank. Reuters