Mexican IPO Comeback Drags Late Into the Night

Mexico’s first equity IPO in 22 months, Grupo Comercial Chedraui, was in limbo late Thursday, with no firm information available, though bankers claimed it was still coming. Despite claims Wednesday that the book was already several times oversubscribed, evidence of this had not yet materialized by 2300 EST. People close to the process say a price had basically been agreed on, but final terms were still being discussed. The family-owned operator of supermarkets, hypermarkets, and warehouse stores in southeastern Mexico was hoping to get MXP5.57bn from the sale of 139.3m primary shares and 15.3m secondary units. This assumed it got done at the midpoint of a MXP32-MXP40 targeted range, but Chedraui was not helped by global equity market volatility amid fears of European sovereign defaults. Shares will be sold in Mexico and the US, with roughly 60% expected to be placed internationally, bankers say. The 154.6m unit total includes a 19.9m share overallotment, and represents a 14.2% stake in the company. Chedraui is raising funds to refinance debt and for other general corporate purposes. Banamex and BBVA Bancomer are leading the Mexican portion of the deal, with Citi and Credit Suisse on the tranche to be done in the US.