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Stock Commentary

Figaro confirms bonkers New Year's Eve IPO date

Merkado Barkada
MB
And don’t get me started about that IPO date! Who even does that?
Merkado Barkada

The PSE just approved the IPO of Figaro Coffee Group [FCG 1.28 pre-IPO], and in the process, confirmed December 31st as the stock’s IPO date. Price will be set on December 10th, with the offer period running from December 16 through December 22. IPO on New Year’s Eve. The company is offering 1.386 billion primary (new) common shares, for up to P1.28/sh (price to be confirmed on Friday).

FCG’s majority shareholder, Camerton Inc, is the Liu Family holdco (they also own Cirtek [TECH 3.92 2.89%through this holdco), and its shares will be subject to a 365-day lockup. About one-third of the proceeds will go towards acquisitions, and another third to store openings and renovations. FCG plans to open 35 Angel’s Pizza stores, 18 TFG Express stores (micro-footprint food stall), 6 Figaro Coffee stores, and 2 Tien Ma’s stores. The group plans to grow its current roster of 46 stores to a total of 150 stores by the end of 2022, and 300 stores by the end of 2029. The prospectus indicates that only 61 of these new stores will be owned by “corporate”, perhaps insinuating that the bulk of the stores to be added under this plan will be franchisee-owned.

MB BOTTOM-LINE

This IPO is really a fascinating animal. First, there’s that ticker symbol. Not going to lie: it sucks. “FCG” is uninspired and bland, like a cup of decaf coffee served “old bathwater warm”, and is an especially egregious choice given the alternative that I suggested months ago, which was “KAPE”. Now that’s a ticker symbol. At the same time, though, I can see why the group might shy away from leaning too heavily on the Figaro Coffee brand, considering how this is really a pizza IPO.

Putting aside the nature of FCG’s potential acquisitions (they admit they don’t have any targets yet; maybe smaller pizza chains with street cred like Gino’s?), the expansion of Angel’s Pizza is really what this transaction is all about. Another interesting wrinkle is that this company is one of the Liu Family’s babies, and your experiences with TECH as a trader, investor, or market-watcher might give you some clues about how this one might go. And don’t get me started about that IPO date! Who even does that? We’ll definitely dig deeper into this IPO once the pricing is confirmed at the end of this week.

 

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Merkado Barkada's opinions are provided for informational purposes only, and should not be considered a recommendation to buy or sell any particular stock. These daily articles are not updated with new information, so each investor must do his or her own due diligence before trading, as the facts and figures in each particular article may have changed.
FIGARO COFFEE COMPANY INITIAL PUBLIC OFFERING PHILIPPINE STOCK EXCHANGE
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