The company, a unit of U.K.-headquartered retailer Tesco PLC, priced its IPO at 10.40 baht (34 U.S. cents) per unit on Saturday, representing a yield of 6.5%, according to people familiar with the deal. The price range for the IPO had been set at 9.65 baht to 10.40 baht. The fund's shares will start trading in Bangkok in mid-March.
Tesco Lotus Retail Growth Freehold & Leasehold Property Fund comprises 17 retail properties across Thailand, each anchored by a Tesco Lotus supermarket. It is Thailand's largest property fund. Tesco Lotus is the market leader in Thailand's supermarket sector, and competes with Thailand's Big C Supercenter PCL and France's Carrefour SA.
The IPO is the biggest in Thailand since Rayong Refinery PCL's $719 million listing in May 2006, according to Dealogic data.
The IPO was well-received both by Thai and large international institutional investors, one person close to the deal said, adding that the fact that investors could access a blue-chip U.K. company with "global pedigree" via a fast-growing market was an attraction.
U.S. fund manager Capital Research & Management subscribed to the IPO as a cornerstone investor, taking up about 110 million units, according to the person. The institutional book of the IPO was about 15 times covered, excluding Capital's position, the person said.
Cornerstone investors agree to invest in an IPO and are subject to a lock-up period during which they can't sell their shares. Capital couldn't be reached for comment immediately.
The demand for the Tesco Lotus fund reflects the strong interest in the country's stock market this year. The benchmark SET Index is up 14% year to date.
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