* Shares rise 1.07 pct after volatile open
* Offering raises around $930 million
* Shares price at low end of guidance
(Adds RIC, closing price)
By Michael O'Boyle
MEXICO CITY, Feb 8 Carlos Slim's retailer
Sanborns raised just shy of $1 billion in its public listing,
but shares made a lackluster debut on Friday amid concerns that
investors may have paid too much for a piece of the world's
Slim, who tops Forbes' list of world billionaires, re-listed
Sanborns in the midst of a global frenzy for Mexican stocks,
which have set successive all-time highs since last year on a
surge of foreign inflows.
Sanborns' offering priced at 28 pesos, at the low end of its
27 pesos to 32 pesos range, raising 12.1 billion Mexican pesos
Grupo Sanborns shares closed at 28.46 pesos,
up 1.64 percent from the offer price, in their first day of
trading on the Mexican Stock Exchange.
The deal valued Sanborns, majority controlled by Slim, at
more than $5 billion.
Global investors appeared less interested than expected in
the deal, aimed at financing expansion of the chain. Shares were
snapped up mostly by Mexicans.
"It did not come at a discount, let's put it that way," said
Santiago, Chile-based Stacy Steimel, who helps manage $600
million in Latin American stocks at PineBridge Investments.
Slim controls a business empire that includes Latin
America's biggest telecommunications company, America Movil
, as well as banking, construction, real estate and
Grupo Sanborns operates coffee shops, restaurants, and
department and music stores across Mexico. It runs Sears stores
in Mexico and brought Saks Fifth Avenue to the country. Slim is
a top shareholder in Saks Inc.
The company earned nearly 3 billion Mexican pesos ($236
million) last year, up from 2.7 billion pesos in 2011.
Mexican stocks are trading at very high valuations on record
inflows. Mexican companies took advantage of the tide to place
around $3 billion so far this year, including Sanborns, the
strongest start of the year for the local market in decades.
However, investors are becoming leery that prices may have
risen beyond the real prospects for growth in Latin America's
second-biggest economy, which has outpaced regional powerhouse
Brazil for the last two years.
Starved by low interest rates in major economies, foreign
investors are piling into riskier assets around the world.
Mexico's market has been one of the top gainers, helped by solid
growth and bets a new government will pass key economic reforms.
Sanborns' stock price rose sharply at the session open only
to slip and then climb back to trade just above its 28-peso-per
share price in Thursday's offering.
"This is not a good omen," said Gerardo Roman, head of
trading at brokerage Actinver in Mexico City. "A lot of people
are already looking to sell."
The banks running the Sanborns offering placed about 60
percent with Mexican investors and 40 percent with global
players. That was below a 50-50 split the offering was aiming
for in its prospectus.
Analysts said if the heavy Mexican skew was comprised mostly
of buy-and-hold pension funds, it could limit the shares'
liquidity and prospects for gains.
Sanborns shares on the Mexican exchange rose
1.07 percent to 28.30 pesos per share after falling to as low as
27.70 pesos and rising as high as 29 pesos.
Sanborns de-listed last decade after being incorporated into
Slim's conglomerate Grupo Carso.
Sanborns tracks its origin to a small drug store opened in
downtown Mexico City in 1903 by American brothers Walter and
The small business added a soda fountain that quickly drew
an eclectic crowd, from Mexican President Porfirio Diaz, who was
fond of sundaes and banana splits, to revolutionary leaders
Pancho Villa and Emiliano Zapata, who went in for hot cocoa.
The coffee shop chain is now an ubiquitous feature of
upper-middle class neighborhoods across Mexico.
($1 = 12.7275 Mexican pesos)
(Additonal reporting by Tomas Sarmiento and Lorena Seguro;
Editing by Nick Zieminski, Jim Marshall and David Gregorio)