CORRECTED-UPDATE 1-LT Group raises $912 mln in Philippines' biggest share offer

Fri Apr 19, 2013 4:34am EDT

(Corrects 8th paragraph from April 17 story to say UBS led in Southeast Asia, corrects UBS deal total in Philippines in 9th paragraph)

* Offer priced at 20.50 pesos per share, top of the range

* Philippines tops Asia ex-Japan market performance in 2013

* Offering beats previous 2010 record set by Cebu Pacific Air

By Rosemarie Francisco and Elzio Barreto

MANILA/HONG KONG, April 17 (Reuters) - LT Group Inc , controlled by tycoon Lucio Tan, raised 37.7 billion pesos ($911.6 million) in a record stock offer for the Philippines, underscoring the country's emergence as a top investment destination in Southeast Asia as investors seek to benefit from its booming stock market and recent upgrade to an investment grade rating.

The offering comes after a banner year for Philippine equity capital markets in 2012 when a record $2.53 billion was raised from IPOs and follow-on deals. The country's benchmark index is up nearly 17 percent so far in 2013, making it the best performer in Asia ex-Japan.

LT Group said in a statement on Wednesday that it priced the offer at 20.50 pesos each, the top of a marketing range of 18-20.50 pesos per share. The original fundraising amount was $793 million with an overallotment of $199 million that was exercised.

"It's fairly expensive. It's difficult to see the upside at this point, but if you're a long-term investor, most likely there is," said Jose Mari Lacson, head of research at brokerage Campos, Lanuza & Co.

The offer was priced a marginal discount to LT Group's last traded price of 20.70 pesos. LT Group shares were suspended on Wednesday ahead of the release of pricing announcement.

The boom in new listings in Southeast Asian markets such as Thailand, Malaysia, Indonesia and the Philippines has helped investment banks compensate for a drop-off in larger Asia-Pacific markets like Hong Kong, China and Singapore.

This year's large listings in the region include Thailand's record $2.13 billion IPO by an infrastructure fund of Bangkok SkyTrain operator this month. Indonesia's PT Matahari Department Store raised $1.3 billion in a share sale in March and Mapletree Greater China Commercial Trust, a Temasek Holdings-backed real estate investment trust, conducted a $1.3 billion IPO in February.

UBS tops equity underwriting in Southeast Asia so far in 2013, excluding the LT Group's offer, according to Thomson Reuters data, closely followed by JPMorgan, with Morgan Stanley at a distant third place.

UBS has led league tables in the Philippines for a third consecutive year, handling $725.4 million worth of deals so far in 2013, before the LT Group deal.

LT Group's deal surpasses a previous record for a Philippines equity offering set by Cebu Pacific Air Inc's $620.8 million initial public offering in 2010, Thomson Reuters data showed. The figures exclude rights issues that tend to come with commitments from major shareholders.

LT Group's offering received commitments worth nearly $500 million from a group of 11 cornerstone investors including global investment firms such as Invesco Ltd, Waddell & Reed Financial Inc and Wellington Management, Thomson Reuters publication IFR reported.

Cornerstone investors in the Philippines are free to sell their shares any time they want, unlike in Hong Kong where they get guaranteed allocations in exchange for holding the shares for a fixed amount of time, typically three months.

The sale will also help boost liquidity in the thinly traded stock. Tan-controlled Tangent Holdings Corp controlled 89.6 percent of LT Group's outstanding stock before the offering.

Tan is Philippines' second-richest man and his business empire spans banks, real estate and air transportation. LT Group, formerly known as Tanduay Holdings Inc, is a holding company with interests in Philippine National Bank, Eton Properties Philippines Inc, Philippine Airlines , and Tan's unlisted firms Fortune Tobacco Corp and Asia Brewery Inc.

Up to 35 percent of the proceeds will be invested in Asia Brewery Inc, Tanduay Distillers Inc and Eton Properties Philippines Inc and up to 30 percent to boost group's banking business, and up 30 percent to repay loans.

UBS AG acted a sole bookrunner on the share offering.

($1 = 41.3800 Philippine pesos)

(Additional reporting by Erik dela Cruz in Manila; Editing by Denny Thomas, Edwina Gibbs and Matt Driskill)

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