Sanborns Oversubscribed Heading into IPO

Grupo Sanborns was heard oversubscribed Wednesday ahead today’s IPO pricing that is targeting MXP12.74bn ($1.00bn) and scheduled to price today. The deal is drawing interest from investors ready to bet on Mexico and on the retail sector. “Retail is a very desirable sector, and more so than Carlos Slim’s other holdings,” says a US investor looking at the deal. The Mexican retail operation owned by Carlos Silm’s Grupo Carso is offering 431.7m shares, assuming a 15% greenshoe, at MXP27.00-MXP32.00 each, according to offering documents. The shares are to be divided into domestic and international tranches. The issuer is raising funds for expansion and working capital. Grupo Sanborns will hold the iconic Sanborns stores, as well as other brands including Sears and Sacks Fifth Avenue, located almost entirely in Mexico, with locations also in El Salvador and Panama. Inbursa and Credit Suisse are global coordinators, with Citi, Morgan Stanley and Santander serving as bookrunners. The deal will leave Sanborns with an 18% free float, and Carso with 82% ownership.