Megaworld Corporation’s real estate investment trust MREIT lowered its initial public offering (IPO) price to P16.10 per share to attract more long-term investors, the company said on Friday, September 10.

MREIT’s final offer price is 26.8% lower than the P22 maximum price announced earlier.

Analysts previously noted that the original offer may have been quite pricey for some interested investors, while the yield was similar to other REITs.

The final number of offer shares is at 884.3 million, with up to 105.5 million option shares.

With the trim, MREIT is now expected to raise P15.3 billion, from the initial P27.3 billion.

Lowering of the IPO price, however, is quite common in the Philippines.

“MREIT will be offering investors an attractive dividend yield of 5.65%, to be distributed quarterly, and at the same time, we will be giving them exposure to high quality, fast-growing portfolio of assets,” said MREIT president Kevin Tan.

The company refuted speculations that the discount was due to sluggish demand for the IPO.

“If we exercised full option, it would have still been oversubscribed 1.5x. At this current size, we are 2x,” Tan said.

MREIT intends to use the proceeds of the IPO, which is among the largest offerings in Southeast Asia, to fund its 21 projects.

MREIT added that post-IPO, Megaworld will retain a 62.5% stake to “capture more near-term and long-term valuation upsides for its shareholders.”

“MREIT expects both its market cap and float to grow over time as it successfully executes on its aggressive growth trajectory,” it said.

MREIT’s offer period will be from September 14 to 20, while the listing date is September 30. – Rappler.com