Maynilad delays IPO until October

Maynilad [MYNLD pre-IPO] [link], the Metro Manila water concessionaire that must conduct an IPO by January 2027 according to the terms of its franchise, said that it will delay its planned IPO until October of this year to allow potential anchor investors more time to participate in the transaction. According to MYNLD, “The potential participation of these investors is expected to add even more value to Maynilad’s public offering and will be viewed positively by all investors and the markets at large”. MYNLD is an affiliate of Metro Pacific Investments (MPIC), DMCI [DMC 10.66 unch], and Marubeni Corporation.

  MB BOTTOM-LINE:  I don’t have any special information to confirm or deny MYNLD’s reasoning for the delay, but the explanation given matches up with my experience dealing with private equity (PE) investors. PE firms can be “squishy” organizations. Most are arranged in a hub-and-spoke model, with several seemingly independent “deal teams” distributed across different sectors and regions pounding the pavement to find the best investments as the spokes, and the centralized “investment committee” (IC) as the hub. The deal teams all fight and negotiate terms for potential investments, and then send those potential deals up to their IC for approval. This IPO is a pretty big deal for the PSE, both in terms of its size and the parties involved, but for international PE investors, this might just be one of several deals of this size (or larger) that they get done this year, so the IC might not get pull together to meet and vote on the possible MYNLD terms as soon as the deal team wants them to. Everyone might just have to wait for it, and in my experience, that’s pretty normal. MYNLD’s implication that landing a few big anchor investors will attract other investors is also true in my experience. Due diligence is expensive, and finance is a copycat game. There are lots of mid-sized funds that are happy to join in on a deal that some other large PE firm has vetted, but they don’t really crawl out of the woodwork and take that job on themselves. They wait for the scraps. It’s smart for MPIC and DMC to cater to these investors, since an IPO of this size will basically rely on the institutional community to move all the shares at a good price. Retail is fine, but we don't carry a deal of this size.