May 9, 2018 / 1:48 PM / 18 days ago

Turkish grocer Sok cuts IPO price, top shareholder to boost stake

ISTANBUL (Reuters) - Turkish grocer Sok Marketler cut the price of its initial public offering by a quarter on Wednesday and its top shareholder placed an order for another $100 million shares, moves designed to boost demand.

The outlook for Sok’s IPO was clouded after two Turkish clothing retailers - Beymen Magazacilik and DeFacto - last week cancelled plans to list, citing low demand.

The cancellations coincide with a downturn in Turkish equity prices after shares reached a record high in January.

The lira currency has hit a series of record lows in recent weeks, reflecting widening concern about the central bank’s ability to rein in double-digit inflation.

Sok, a discount grocer whose largest shareholder is the investment arm of food giant Yildiz Holding, cut its IPO price guidance to 10-10.5 lira a share, one of its bookrunners said. The bookbuilding period was extended to May 11, it said.

It initially priced the IPO at 12-14.4 lira a share. That means Sok is likely to raise up to 2.3 billion lira ($537 million) in the listing, a discount of a quarter from the 3.1 billion lira that was originally the top end of its range.

A second bookrunner said the company’s top shareholder, Gozde Girisim, has placed “a further order” in the international bookbuilding for $100 million. Any shares acquired by it will be subject to a lockup of 18 months, it said.

Gozde Girisim is the investment arm of food giant Yildiz Holding, which owns Godiva chocolate and McVitie’s biscuits.

Shares in Gozde Girisim fell as much as 7.8 percent after the announcement.

Sok said on Monday it planned to allocate 85 percent of its shares to foreign investors. It is due to start trading on the Istanbul bourse on May 16.

Bookrunners have previously said that proceeds from the flotation would be used to repay all of its current debt.

At the end of 2017, Sok operated 5,100 stores and employed more than 24,000 people.

Investors’ cooling sentiment on IPOs has not been confined to Turkey. Springer Nature, the publisher of science magazines Nature and Scientific American, this week cancelled a 3.2 billion euro ($3.80 billion) flotation on weak investor demand, dealing a heavy blow to Germany’s vibrant IPO season.

(This story has been refiled to correct to show IPO price was only cut once, paragraph one.)

Additional reporting by Dasha Afanasieva in London; Writing by David Dolan; Editing by Daren Butler

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