The company’s shares plunged by 18.8% to P4.14 apiece at closing in a market that ended flat, with an analyst blaming market uncertainty and the discounted offer price for dampening confidence in the equity.
Tanduay Holdings’ closing price, in effect, fell to roughly match the offer price of P4.22 apiece.
“The selling price affected the closing price,� Freya B. Natividad, an analyst of brokerage firm 2TradeAsia.com, said in a telephone interview.
“Most investors decided to sell their share after the lower price offering,� Ms. Natividad said.
Tanduay Holdings shares were last sold for P5.10 apiece before trading was suspended to make way for the share sale.
“Part of this is also the uncertainties in the market,� Ms. Natividad added.
Other listing debuts this year posted mixed results on their first trading day.
Megawide Construction Corp. ended flat in February while shares of supermarket chain Puregold Price Club, Inc. slumped during its listing last October.
In contrast, Laguna-based chipmaker Cirtek Holdings Philippines, Corp. enjoyed a surge as did water utility Calapan Ventures, Inc. on their first trading day.
Software distributor Touch Solutions, Inc., for its part, is set to list on Dec. 19.
Tanduay Holdings nevertheless boasted of the share sale’s results.
“Tanduay Holdings is pleased to announce that the secondary offering of 398,138,889 common shares owned by [its controlling stakeholder] Tangent Holdings Corp. at the offer price P4.22 was fully purchased by a mix of institutional and retail investors,� the firm said in the statement.
The company allotted 20% of the total shares to be sold to the trading participants of the PSE, while the 80% was intended for institutional and retail buyers.
Proceeds amounting to P1.68 billion would be immediately re-invested by Tangent Holdings into Tanduay Holdings in the form of deposit for stock subscription.
It will be used to finance the expansion of capacity, improvement of operational efficiencies and rationalization of operations, the company said.
Tanduay Holdings’ public float level is now seen to hit 12.63%, or above the local bourse’s minimum threshold, from 2.92% earlier.
Bourse officials have earlier said that companies whose public float level is below 10%, will have until Jan. 1, 2013 to comply with the requirement.
Otherwise, erring listed firms might face delisting and be slapped with 5%-10% capital gains tax.
Tanduay Holdings’ net income for January to September grew by 60% to P885 million over year-ago levels on the back of price increases and cost efficiency measures according to earlier reports.
The firm is eyeing P1.1 billion in profits this year, nearly double from last year’s P645.267 million full-year net income. — CHCV