Recalcine Misses Target, Trades Up

Chile’s Recalcine (CFR) missed its target on a CLP172.72bn ($368m) IPO, though it saw its shares end up more than 13% in the market. The acquisitive pharmaceutical company with a presence in 19 countries announced a price Thursday morning below the target minimum price it had set for Wednesday’s auction, raising less than the $400m-equivalent it had hoped for. It priced the 2.03bn shares at CLP85 per share, below the CLP90 floor it had wanted. A CLP90 price would have meant a CLP182.7bn ($390m) sale that would have been closer to the $400m expectation. However, the shares were in demand in their first session, closing Thursday at CLP96.36, up 13.4% from the issue price. Total demand on the Chile’s first IPO of the year reached CLP1.56trn ($3.40bn) from 4,518 orders, but orders at or above CLP90 were not sufficient and the issuer chose to price below, according to a Bolsa filing. About 24% of the sale was bought as ADS, and foreign investors buying local shares accounted for another 31% of the deal, according to the bolsa. Domestic pensions and insurance companies made up 21%, and 10% went to retail investors, with the remainder going to other investors. Analysts’ fair price estimates varied between CLP70-CLP100 prior to the sale. Most see it as an attractive investment given its strong presence in the region and capacity to expand in LatAm and other EM as the health sector reaches more people with rising incomes in these countries. CFR is raising funds for new acquisitions, as well as for refinancing debt and organic expansion. The sale includes 1.7bn primary shares, as well as 336m secondary shares sold by the controlling Weinstein family. LarrainVial, Jefferies and JPMorgan managed the sale, the first Chilean IPO since a CLP109bn sale from Camanchaca in November. Next up in Chile’s IPO market is fishery AquaChile, pricing an IPO May 19 targeting about $250m equivalent.