Italian fashion house Prada cut the final price of its IPO by almost a fifth, raising $2.1 billion (€1.48 billion), as investors balked at a rich valuation and weak global markets.
The maker of luxury bags and Miu Miu dresses set what is Hong Kong's biggest IPO this year at the lowest end of its revised indicative price range, sources with direct knowledge of the deal said today.
Prada's move came a day after luggage brand Samsonite International slumped almost 8 per cent in its Hong Kong trading debut.
Only MGM China has posted a first-day gain among the largest IPOs in Asia this year, reflecting investor caution at risking capital in weakening markets. Hong Kong stocks have risen in only one session in the last 12.
Milan-based Prada priced its initial public offering at HK$39.50 a share, the bottom of a revised indicative price range issued yesterday. Prada had originally targeted garnering up to $2.6 billion.
Despite all the glamour around the IPO, increased volatility in global markets and Samsonite's poor debut weighed on the offering, with Prada cutting the mid-point of its IPO.
"The equity market has its own life and may not have anything to do with reality in luxury goods markets," Selina Sia, head of consumer research at Mirae Asset in Hong Kong, said yesterday. "Luxury demand is very self explanatory and it makes a lot of sense for companies like Samsonite and Prada to list in Hong Kong, but we're talking about quite a volatile market these days."
Prada and shareholders Prada Holding BV and Intesa Sanpaolo sold 423.3 million shares raising HK$16.72 billion (€1.5 billion), according sources.
The deal was the biggest IPO in Hong Kong so far in 2011, surpassing the $1.96 billion (€1.38 billion) by Shanghai Pharmaceuticals in May.
The IPO values Prada at about $13 billion (€9.1 billion), compared with the nearly $80 billion (€56.5 billion) market capitalisation of rival LVMH and $28.5 billion (€20.1 billion) for Hermes.
Reuters
