South Korea's Hotel Lotte plans $4.9 billion IPO, year's largest: sources
By Lee Chang-ho and Joyce Lee
SEOUL (Reuters) - South Korea's Hotel Lotte Co Ltd [HTLOT.UL] plans a share sale worth up to 5.7 trillion won ($4.85 billion) next month, sources said on Wednesday, in what would be the world's biggest initial public offering since late 2015.
The sprawling Lotte Group said last year it would list Hotel Lotte, which includes the third-largest global duty-free retail chain, as part of efforts to simplify its ownership structure amid a family feud over leadership succession.
The listing would headline what could be a bumper year for South Korean IPOs, fueled by a rise in the share market and as conglomerates that dominate Asia's fourth-largest economy restructure.
About 86 percent of Hotel Lotte's revenue in the January-March quarter came from its duty-free business, according to a company filing.
However, competition in South Korea's tax-free shopping industry - the world's biggest - is intensifying, and Lotte is poised to lose the license on its second-largest store, in Seoul, when it expires at the end of June.
Two Seoul-based fund managers said institutional investors were likely to buy at least some of the listing shares due to the massive offer size, although duty-free uncertainties may weigh on sentiment. They declined to be identified before the IPO filing document is available.
Last month, South Korea said it would issue four more duty-free store licenses in Seoul, taking the number of stores to 13 by the end of 2016 from six a year earlier. While that could enable Lotte to replace its expiring license, it intensifies competition.