Alpek IPO Heard Well-bid

Mexico’s Alpek was due to price late Wednesday a MXP10.44bn-MXP11.96bn ($794m-$910m) IPO, which had been heard oversubscribed. The sale is to be the country’s first IPO since July with the Grupo Alfa-controlled petrochemicals producer looking to sell 379.8m shares, including an overallotment, at MXP27.50-MXP31.50 each. “This is an excellent company, and stands out in Mexico. This should be well-demanded,” says a participating Mexico City-based investor. He says the bottom half of the price range represented an attractive valuation, with the upper half starting to get expensive. Analysts had spotted the valuation at 6.9x-7.8x Alpek’s 2012 earnings, compared to Mexichem’s 7.6x and a 7.3x-7.5x sector average. The polyethylene and polypropylene producer, many of whose products are used in the food and beverage industry, is raising funds to repay debt and for general corporate purposes. Credit Suisse, Citi, HSBC and Morgan Stanley are managing the sale, in which 75% of the shares were marked for international distribution. The deal would be the first Mexican IPO since BanRegio raised MXP2.09bn in July, and could be the largest-ever IPO on the Bolsa. Larger debut sales from Mexicans, including Fresnillo, GAP and Telmex, were done on foreign bourses as ADRs or GDRs. Optimists – rising in number along with the country’s benchmark index and the likelihood of a change in government this year – hoped that the blue-chip deal would pave the way for increased levels of new issuance in Mexico. Santander Mexico is the big name in the pipeline, with others having considered a float including Credito Real, Cinepolis, Volaris and Ideal.