Belle International eyes HK$8.6b in main-board listing
Belle International and four of its shareholders plan to raise as much as HK$8.6 billion by selling new and existing shares for listing on the main board later this month, sources said.
The international roadshow started yesterday for the sale of 1.39 billion shares in the mainland's largest female footwear retailer, at HK$5.35 to HK$6.20 apiece. That translated to between 27 and 31 times forecast earnings for this year, slightly higher than the industry average of 25 times, one source indicated.
According to a source, LVMH Moet Hennessy Louis Vuitton, the largest luxury-goods maker in the world, has agreed to take a US$30 million stake in Belle, or about 3 per cent of the institutional portion, based on the 90 per cent of the issue allotted to the tranche.
About 83 per cent of the offering is new share issues from the company, and the remaining is being sold by the chairman and three other stakeholders, according to its preliminary listing prospectus.
The sale could allow the four to reap as much as HK$1.5 billion if the shares are priced at the top end.
'The institutional portion has been fully covered within few hours of opening the order book,' the source said.
'The valuation is not too pricey, compared to some recent IPOs that priced their shares with a ridiculous valuation because of the China play concept,' said a fund manager who is considering buying into the offering.
Belle owns more than 2,800 ladies' footwear stores and concessionaire counters, and more than 1,050 sports shoe stores under the brands Belle, Teenmix, Tata and Staccato. It is also the licensee of Joy & Peace and Bata.
The firm will use about 30 per cent of the IPO proceeds to acquire companies or form alliances with strategic partners, 25 per cent for retail outlet expansion and 20 per cent to improve production facilities.
The remaining will go to working capital and debt repayment.
Belle said its net profit amounted to more than 976 million yuan for last year, almost three times its 2005 earnings of 234 million yuan, the sale document shows.
The retail tranche will be launched from next Wednesday and all orders will stop being accepted on May14. Trading is expected to begin on May 23. Morgan Stanley and Credit Suisse are the joint book runners of the offering.
