Prada scales back IPO pricing
Source: Bloomberg News |
June 17, 2011, Friday
|
Print Edition
Print Edition
PRADA SpA cut the maximum amount it may raise in an initial public offering as Samsonite International SA slumped in its trading debut and Hong Kong stocks slid amid concern that the Chinese mainland economy may cool.
The Milan-based luxury goods retailer narrowed its IPO price guidance, bringing the maximum it would raise to US$2.3 billion, down from US$2.6 billion, according to two people familiar with the matter. It also raised the low end, said the people, who declined to be identified.
Prada's scale-back came as individual investors in Hong Kong failed to take up the full amount of the IPO set aside for them, and followed a drop of as much as 11 percent in shares of Samsonite, the world's largest branded-luggage maker, from its initial public offering price of HK$14.50. The Mansfield, Massachusetts-based company raised US$1.25 billion in the sale last week, less than initially planned.
"The timing of Samsonite's listing isn't that great," said Masahiko Ejiri, a Tokyo-based fund manager at Mizuho Asset Management Co, which oversees US$41 billion. "The global economy might be weaker than expected, so people are just very cautious about buying into equities. It might be the same for Prada."
Since Samsonite priced its offering last week, the Hang Seng Index has added to a decline that has brought it down 10 percent from its April 8 close. China's central bank raised bank reserve requirements on Tuesday for the ninth time since October, fueling concern economic growth will slow.
Samsonite is the fourth Hong Kong IPO exceeding US$1 billion this year to begin trading. All four have dropped from their initial sale price, by an average of 8 percent, according to Bloomberg data. The luggage maker fell 7.7 percent to end at HK$13.38 at the close in Hong Kong, compared with a 1.8 percent drop on the Hang Seng.
The declines by new listings will weigh on Prada as its tries to price its offering, said Philippe Espinasse, former co-head of Asian equity capital markets at Nomura International Hong Kong Ltd. Prada's final offering price is expected out by today, according to the prospectus.
Individual investors in Hong Kong have placed orders for only about half of the 42.3 million Prada shares offered to them, two people with knowledge of the matter said. The stock offered to retail investors accounts for 10 percent of Prada's total offering, according to the IPO prospectus.
The banks managing Prada's IPO have the authority to reallocate any shares left unsubscribed by individual investors to institutions.
"There's going to be a lot of pressure on Prada," said Espinasse, the author of "IPO: A Global Guide." "The fact that retail investors haven't gone for it is going to be an issue."
The Milan-based luxury goods retailer narrowed its IPO price guidance, bringing the maximum it would raise to US$2.3 billion, down from US$2.6 billion, according to two people familiar with the matter. It also raised the low end, said the people, who declined to be identified.
Prada's scale-back came as individual investors in Hong Kong failed to take up the full amount of the IPO set aside for them, and followed a drop of as much as 11 percent in shares of Samsonite, the world's largest branded-luggage maker, from its initial public offering price of HK$14.50. The Mansfield, Massachusetts-based company raised US$1.25 billion in the sale last week, less than initially planned.
"The timing of Samsonite's listing isn't that great," said Masahiko Ejiri, a Tokyo-based fund manager at Mizuho Asset Management Co, which oversees US$41 billion. "The global economy might be weaker than expected, so people are just very cautious about buying into equities. It might be the same for Prada."
Since Samsonite priced its offering last week, the Hang Seng Index has added to a decline that has brought it down 10 percent from its April 8 close. China's central bank raised bank reserve requirements on Tuesday for the ninth time since October, fueling concern economic growth will slow.
Samsonite is the fourth Hong Kong IPO exceeding US$1 billion this year to begin trading. All four have dropped from their initial sale price, by an average of 8 percent, according to Bloomberg data. The luggage maker fell 7.7 percent to end at HK$13.38 at the close in Hong Kong, compared with a 1.8 percent drop on the Hang Seng.
The declines by new listings will weigh on Prada as its tries to price its offering, said Philippe Espinasse, former co-head of Asian equity capital markets at Nomura International Hong Kong Ltd. Prada's final offering price is expected out by today, according to the prospectus.
Individual investors in Hong Kong have placed orders for only about half of the 42.3 million Prada shares offered to them, two people with knowledge of the matter said. The stock offered to retail investors accounts for 10 percent of Prada's total offering, according to the IPO prospectus.
The banks managing Prada's IPO have the authority to reallocate any shares left unsubscribed by individual investors to institutions.
"There's going to be a lot of pressure on Prada," said Espinasse, the author of "IPO: A Global Guide." "The fact that retail investors haven't gone for it is going to be an issue."
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