Max’s sets offer price at P29.50

MANILA, Philippines -  Max’s Group Inc., formerly Pancake House Inc., has set the price of its rights offer at a maximum of P29.50 per share, it said in a prospectus filed to the Securities and Exchange Commission (SEC).

Max’s Group earlier said it intends to raise up to P4.6 billion from its proposed sale of common shares through a follow-on offering.

“The offer price was determined through a book-building process, as well as discussions between the company and the issue manager and lead underwriter,” the casual dining chain operator said.

BPI Capital Corp. has been appointed as bookrunner, issue manager and lead underwriter for the transaction.

Max’s Group plans to sell up to 300.136 million common shares composed of 34.106 million new shares, 204.638 million issued shares held and to be sold by certain wholly-owned subsidiaries, and 61.391 million issued shares to be sold by certain selling shareholders.

The company said it eyes to indicatively raise P3.5 billion from the primary share tranche while selling shareholders are expected to raise another P500 million from the secondary share tranche.   

If over-allotment options on the secondary shares are to  be fully exercised, approximately P600 million could also be raised by existing shareholders.

The group shares will be offered and sold by wholly-owned subsidiaries The Real American Doughnut Company Inc., Max’s Bakeshop Inc.,Max’s Kitchen, Inc., No Bia Inc., Chickens R’ Us Inc., Square Top Inc., MGOC Holdings Inc., Trota Gimenez Realty Corp., RooM Ventures Corp. and Max’s Express Restaurants Inc.

The secondary shares, meanwhile, will be offered and sold by Trofi Ventures Corp., WERCO Holdings Corp., Ruby Investment Consolidated HoldingInc., WR Ventures Asia Inc., and FSS Realty Corp.

“The total proceeds to be raised from the sale of the offer shares will be up to P4.6 billion, out of which up to P500 million will accrue directly to the company from the sale of new shares, and up to P3 billion will accrue to the selling subsidiaries. The amount of up to P1.1 billion will accrue directly to the selling shareholders,” the Max’s Group said.

Max’s Group said estimated net proceeds from the sale of the new shares will be used to finance capital expenditures for the expansion of the stores and commissaries, pay working capital and for other general corporate purposes.

The proceeds to be received by the selling subsidiaries, meanwhile, will be used to repay a portion of the debt of the selling subsidiaries, it added.

The transaction is expected to substantially increase the company’s free float to at least 30 percent after the issuance.

The Max’s Group was folded into Pancake House last month in a P4-billion reverse acquisition that cemented the group’s position as the largest casual dining chain in the Philippines.

The integration created the country’s leading chained full service restaurant group with a combined market share of 28.3 percent in terms of value sales as of end 2013.

The Max’s Group said consolidated revenues as of the first half of the year reached P4.58 billion, with the Max’s entities contributing P2.78 billion and the Pancake House Group contributing P1.83 billion.

Total assets of the group on a consolidated basis was at P9.3 billion as of end-June.

Max’s Group has already changed its trading symbol on the PSE to MAXS from the former PCKH.

Max’s Group and its subsidiaries presently have a network of 498 outlets nationwide and 27 outlets abroad composed of brands Max’s Restaurant, Pancake House, Yellow Cab, Dencio’s, Kabisera ng Dencio’s, Teriyaki Boy, Max’s Corner Bakery, Maple, Sizzlin’ Steak and Le Coeur de France.

The group also operates in the Philippines international food brands such as Krispy Kreme, Jamba Juice and The Chicken Rice Shop.