Delay of IPO
Doosan Bobcat Inc., U.S.-based leading compact construction equipment maker, is considering the delay of its initial public offering (IPO) on the Korean stock market, which will affect the restructuring of Doosan Group. This is because the company conducted bookbuilding on October 7 after setting in September a preliminary price range between 41,000 won and 50,000 won (US$37 to 45) per share for the IPO and found that institutional demand flocked into below the price band.
Doosan Infracore, the biggest shareholder of Doosan Bobcat, and its representative lead managers for the IPO – JP Morgan and Korea Investment & Securities – held an urgent meeting on the 9th to discuss the future IPO plans again. At the meeting, some said that the company should keep proceeding the IPO as planned by reason of investor confidence and financial structure improvements, while others said that the low offering price can adversely affect the credit rating of Doosan Group as a whole.
Doosan Group will consider whether to set the offering price below than the preliminary price range or put the IPO off a month and make a final decision on the 10th. An official from the lead managers said, “We expected to have the offering price at the top level of the preliminary price range on the first day of bookbuilding, but things got changed as domestic institutions flocked into the lower level of the offering price range for two days in a row.”
Doosan Bobcat is the leading compact construction equipment maker, including compact excavator, in the North American market and considered to have a high growth potential by raising its market share in Europe and Asia. However, the IPO was wholly consisted o