UPDATE 1-Robinsons Retail cuts Philippines' biggest 2013 IPO by up to a third
* Gokongwei family firm seeks up to $777 mln in sale
* Share price range cut from previous maximum value
* Equity markets still fidgety on U.S. debt default
MANILA, Oct 14 (Reuters) - Robinsons Retail Holdings Inc sliced up to a third off the value of the Philippines' biggest share sale this year, hoping a cut-price offer will lure investors despite global market jitters over how the United States' budget showdown will play out.
The department store and supermarket operator, owned by one of the country's richest families, the Gokongweis, said on Monday it expects to raise 27.9 billion to 33.5 billion pesos ($647 million to $777 million) by selling up to 484.75 million new shares, including over-allotment options.
It lowered the price of its planned issue to 55 pesos to 66 pesos per share from an earlier maximum of 86.64 pesos. The final price will be announced on Oct. 24, with shares due to trade from Nov. 11.
The lower end of the range values the initial public offering 36 percent below the 42 billion pesos Robinsons Retail had originally planned to raise in order to fund expansion of its domestic stores network. The upper end of the range values the deal at about 20 percent below the previous maximum.
Robinsons Retail is selling shares as Southeast Asian equity fund-raising shows some signs of renewed vigour, with two deals worth $1.4 billion completed in Malaysia earlier this month. Yet analysts say a market overhang still exists as long as the possibility of a U.S. debt default looms.
"The macroeconomic environment will be a key factor, and what happens in the U.S. will have strong implications for the IPO market here," Alvin Lim, managing director and head of Singapore advisory at HSBC, said regarding the Southeast Asian region.
In the Robinsons Retail offer, a portion may go to cornerstone investors from all over the world, said Bach Johann Sebastian, senior vice president at Robinsons' parent company JG Summit Holdings. He declined to give more details .
Sebastian said the price guidance gives Robinsons Retail a price-to-earnings ratio of 20-24 times forecast 2014 net income, below 26 for its nearest local rival, Puregold Price Club , and comparable to the range of 20-30 for regional peers such as Indonesia's Matahari Department Store.
"Anybody pricing himself over 15 to 20 times' earnings is crossing into the expensive category," said Jose Mari Lacson, research head at Campos, Lanuza & Co in Manila. "But people are willing to pay more than 20 times these days because of the confidence in the local market, and the country's growth story."
The Robinsons Retail offer may also come at the right time for the market.
Jose Vistan, research head at AB Capital Securities Inc in Manila, said 2014 will be a more difficult environment for equity issues, with interest rates likely to start rising and a possible reversal in currently high liquidity levels.
"But while the volatility will likely curb IPO valuations and delay some potential listings, we believe investors will eventually return to the market over the longer term," he said, adding the IPO pipeline in the region continues to be strong.
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