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Institutional investors expressed interest in
more than 1,000 times the number of shares on offer, with Big
Hit riding on the success of the seven-member band, which has
become the first South Korean group to reach No.1 on the U.S.
Billboard Hot 100 singles chart with song "Dynamite".
An army of retail investors, known in South Korea as Ants, is
also clamouring to buy stock, while die-hard BTS fans are
bidding in hopes of securing even one share in what analysts
expect to the country' hottest listing this year.
Big Hit priced the IPO at 135,000 won ($115) per share, it said
in a regulatory filing, the top of an indicative price range of
105,000-135,000 won announced earlier this month.
Some 1,420 institutional investors sought shares in
pre-subscription offers, looking for 1,117 times the number
available, the filing said. About 98% said they would pay the
top-range price or more.
"Big Hit is classified as a kind of global export firm," said
Park Sung-ho, analyst at Yuanta Securities Korea.
"Not only has it proven its ability to use Youtube, social media
for smart market infiltration, it has fandom platform Weverse
which gives unprecedented clarity and control over its revenue
sources for a label, and may grow into a true platform player as
outside artists increasingly join."
Big Hit reported a 49.7 billion won ($42.4 million) profit for
the first half of 2020 as its online concert and merchandise
sales on the Weverse app more than offset event cancellations
during the COVID-19 pandemic.
The IPO will make the seven BTS members multimillionaire
stockholders, as Big Hit CEO Bang Si-hyuk in August gave them
68,385 shares each, worth nearly $7.9 million at the issue
price.
The firm will raise 962.6 billion won ($820 million) through the
offer of 7.13 million new shares, the biggest South Korean IPO
since Celltrion Healthcare raised 1 trillion won in 2017.
The pricing values Big Hit at about 4.8 trillion won, taking
into account common shares plus redeemable preferred shares that
will be converted into common shares upon the IPO.
With plenty of liquidity in the market, some analysts predict
gross bids from retail investors could hit 100 trillion won ($85
billion).
The central bank is watching the offer closely as a massive
oversubscription for shares could send ripples through
short-term money markets.
Institutional and retail investors' subscriptions are due on
Oct. 5-6 and Big Hit is expected to list on the KOSPI on Oct.
15.
(Reporting by Joyce Lee; Editing by Richard Pullin)
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