Fibra Hotel Prices Well Bid Follow-on

Concentradora Fibra Hotelera Mexicana has priced an equity follow-on that should raise MXP4.89bn ($382m), getting nearly 6x demand and coming at a 5.6% discount. The hotel real estate fund owned by Grupo GDI and known as Fibra Hotel is selling 196m primary shares, assuming a 15% greenshoe, at MXP24.95 each, according to people familiar with the sale. The price compares to Thursday’s MXP26.44 closing level. The sale was expected to be allocated roughly equally between international and Mexican tranches, and buyers are said to include 10 Mexican Afores and about 50 international funds. “This is still an excellent growth story,” says a US-based equity investor looking at the deal. “The macroeconomic growth in Mexico continues to offer a strong demand for real estate assets and inflows for the Fibras,” Luis Rodriguez, head of research at Finamex, tells LatinFinance. In the case of hotel-focused Fibras the success depends on a continuation of overall economic growth that fosters business travel. He notes a push to allow Fibras into the IPC index, which if successful could improve the attractiveness of the asset class even more going forward. The issuer is raising proceeds for acquiring and developing additional properties, as well as for general corporate purposes. Fibra Hotel should see growth allowing Ebitda to increase by more than 50% in 2013 and again in 2014, Ve por Mas says in a research report, noting a MXP36.50 target price for the end of 2014. BBVA and JPMorgan were global coordinators on the transaction, joined by Goldman Sachs on the international portion and Evercore and Banorte-Ixe on the domestic piece. The fund includes 39 operating Mexican hotels and 16 in development, under the Fiesta Inn, One and Camino Real brands, in 22 Mexican states. Its shares have gained more than 40% since the MXP4.1bn IPO in November. Thursday’s follow-on kicks off a busy June-July period in Mexico’s ECM. Vesta, OHL Mexico and Inbursa are all planning follow-ons, and hotel oper