S.Korea's Doosan Bobcat to trim IPO plans after valuation miss (updated)

HD Hyundai Infracore Co

10/10/2016 04:58

* Was to be S.Korea's 2nd-largest listing at top of range 
    * Offering size too big, price high compared to S.Korean 
peers-sources 
    * S.Korea expects other big-ticket IPOs by early next year 
 
 (Recasts, adds investor views, background) 
    By Joyce Lee 
    SEOUL, Oct 10 (Reuters) - South Korea's Doosan Bobcat Inc on 
Monday cancelled plans for an up to 2.45 trillion won ($2.2 
billion) initial public offering after the valuation fell short 
of its targets, and is expected to relaunch a smaller IPO within 
days. 
    The construction equipment maker would submit a new IPO plan 
with a view to listing as soon as next month, a spokesman for 
parent company and largest shareholder Doosan Infracore Co Ltd 
 042670.KS  said. 
    The troubled offering could prompt rethinks about the 
valuations of other big-ticket South Korean IPOs in the works, 
such as Samsung BioLogics Co Ltd's up to $2 billion planned 
offering or that of the country's largest mobile games company, 
Netmarble Games Corp.  urn:newsml:reuters.com:*:nL3N1CA1TV urn:newsml:reuters.com:*:nL3N1C622T 
    "The market appears to have felt the size of the offering 
was too big for it to handle, and some other conditions did not 
meet market expectations," the Doosan Infracore spokesman said.  
    Doosan Infracore shares slumped as much as 13 percent to 
their lowest intraday level in over 3 months on Monday after the 
news.  urn:newsml:reuters.com:*:nL4N1CG01T 
    Doosan Bobcat sees strong potential for its main market of  
North American housing but investors thought its IPO was too 
expensive compared with South Korean peers, two Seoul-based 
institutional investors told Reuters, declining to be identified 
as they were not authorised to speak to media.  
    Both people said they had submitted a price below the 
preliminary pricing range of 41,000-50,000 won per share during 
last week's bookbuilding.  
    At the top of the range it could have been South Korea's 
second-largest listing ever.  urn:newsml:reuters.com:*:nL3N1BK330 
    Doosan Bobcat set its preliminary pricing range by comparing 
with global peers such as Caterpillar Inc  CAT.N  and Komatsu 
Ltd  6301.T .  
    "We have conducted a bookbuilding to determine the final IPO 
price but decided to postpone the IPO considering conditions 
such as the difficulty of receiving an adequate evaluation of 
the company's value," it said in a filing earlier on Monday.  
    Doosan Bobcat has North America's largest market share for 
small construction equipment such as skid-steer loaders. It has 
31 subsidiaries in 20 countries, and reported sales of 4.04 
trillion won and net profit of 148 billion won in 2015.  
    Doosan Infracore said earlier this year favourable 
conditions in the North American housing construction market 
accelerated the listing plan.  urn:newsml:reuters.com:*:nL3N162072 
    The IPO proceeds are earmarked to pay off Doosan Infracore 
debts.  
    Under South Korean exchange rules, Doosan Bobcat has until 
February 2017 to list or start the process over.  
    Doosan Infracore and affiliate Doosan Engine Co Ltd 
 042670.KS  currently own a combined 78 percent stake in Doosan 
Bobcat. 
 
    ($1 = 1,114.7500 won) 
 
 (Reporting by Joyce Lee; Editing by Diane Craft and Stephen 
Coates) 
 ((jungyoon.lee@thomsonreuters.com; +82 2 3704 5609; Reuters 
Messaging: jungyoon.lee.thomsonreuters.com@reuters.net)) 
 
Keywords: DOOSAN BOBCAT IPO/