Slim Retailer Clinches $950m IPO

Grupo Sanborns has priced a MXP12.09bn ($950m) IPO, landing near the low end of the price range. Demand for the deal was heard to be about 2x. The retail operation being carved out of Carlos Slim’s Grupo Carso priced 431.7m shares, assuming a 15% greenshoe, at MXP28.00 each, versus a MXP27.00-MXP32.00 range. The sale had to overcome recent concerns about Carlos Slim companies, with crown jewel America Movil seeing possible losses at its Dutch investment KPN. That said, many on the buyside noted that Sanborns represents some of the top assets in Slim’s portfolio, with retailers likely among the biggest beneficiaries if Mexico’s economy lives up to strong forecasts. “This is a strong company and well known, but it may be similar to Cultiba. Valuations are rich in Mexico right now, and investors are very disciplined,” says an ECM banker away from the deal. Pepsi bottler Cultiba priced at the low end of its range last week in a $310m IPO. Sanborns is raising funds for expansion and working capital. It contains the iconic Sanborns stores, as well as other brands including Sears and Saks Fifth Avenue, located almost entirely in Mexico, with locations also in El Salvador and Panama. Inbursa and Credit Suisse were global coordinators, with Citi, Morgan Stanley and Santander serving as bookrunners. The deal was expected to leave Sanborns with an 18% free float, and Carso with 82% ownership. The sale is the last is a busy period for the region’s ECM, with other deals in the pipeline expected to wait for the 4Q financials window.