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Thailand's largest IPO braves market, priced near top of range

SINGAPORE/HONG KONG (Reuters) - Thailand’s largest retailer, Central Retail Corp, priced its initial public offering (IPO) near the top end of an indicative range, in a deal worth about $2.5 billion, making it the country’s largest IPO ever.

FILE PHOTO: Tos Chirathivat, the Chief Executive Officer of the Central Group looks on during a news conference at a hotel in Bangkok, Thailand, March 2, 2016. REUTERS/Athit Perawongmetha/File Photo

With the IPO priced on Thursday at 42 baht ($1.36) a share, the company said it is raising 78.1 billion baht after fully exercising its overallotment option amid markets weakened by worries that a virus outbreak could dampen world economic growth.

Citing sources, Reuters reported on Wednesday that the company had priced the IPO at 42 baht per share.

“In these volatile markets, the launch of Central Retail’s IPO shows the strength of its business and confidence from investors who look for equities that have strong fundamentals and industry leadership,” said Anuwat Ruamsuke, managing director of Phatra Securities, a financial adviser for the deal.

Thailand’s stocks index has fallen about 4% and the baht has also weakened since mid-January, when the deal’s indicative price band was set, as the virus outbreak has escalated and its economic impact has been felt globally.

The death toll from the epidemic has surpassed 500 in China, mostly in and around the locked-down central city of Wuhan where the virus emerged late last year.

Central Retail, controlled by the billionaire Chirathivat family, set the indicative price band at 40 to 43 baht, and secured cornerstone investors such as Capital Research Management and Singapore sovereign wealth fund GIC.

At 42 baht, the firm has a trailing price-to-earnings multiple of 30 times against the sector average of 33.9 times, Refinitiv Eikon data showed. It would have a market value of 260 billion baht ($8.37 billion), making it the 15th largest company on the Thai bourse.

The IPO, first announced in July, comes after Thailand took the top spot in Southeast Asia in 2019 with $4 billion in fundraisings, according to Refinitiv data. A slew of large issues is in the pipeline for this year.

“The negative sentiments surrounding markets and weakening Thai economy are short-term bearish concerns,” said Oshadhi Kumarasiri, an equity analyst at LightStream Research, who writes on the platform Smartkarma.

“Still, the quality of Central Retail’s asset base justifies the IPO price.”

As part of its listing plans, Central Retail is offering a share swap worth up to 34.1 billion baht to shareholders of its retail unit Robinson Pcl, and will delist the firm.

Central Retail’s shares will start trading on Feb. 20.

Morgan Stanley, Credit Suisse and UBS are the main international banks working on the IPO.

($1 = 31.0600 baht)

Reporting by Anshuman Daga and Scott Murdoch; Additional reporting by Chayut Setboonsarng in Bangkok; Editing by Louise Heavens and Jason Neely