Lotte IPO Price: 400,000 Won Per Share

The share price of Lotte Shopping’s initial public offering (IPO) will be 400,000 won. The shares will go on sale in Seoul and London simultaneously on February 9.

Daewoo Securities, the company in charge of the IPO, announced Friday that it chose this price through a demand-forecast analysis by institutional investors.

The price is much higher than market analyst predictions. Lotte Shopping initially suggested between 340,000 and 430,000 won as its preferred price when it submitted its securities enlistment application to the Financial Supervisory Service. Analysts predicted that because the stock market was experiencing moderate adjustments, the asking price of the stock would not exceed 380,000 won.

Lotte Shopping will secure 3.43 trillion won after its stock is listed on the Seoul and London exchanges at 400,000 won each per share. 1,714,286 shares will be listed in Seoul, and 6,857,143 shares are to be listed in London, netting Lotte Shopping 685.7 billion won and 2.74 trillion won, respectively.

Based on the offering price, the market capitalization of Lotte Shopping will reach 11.43 trillion won. It will surpass its rival Shinsegae, which has a market capitalization of 9.3 trillion won, and become the 11th largest company in Korea in terms of market capitalization. Shinsegae is also expected to list its stock on February 9 after public subscriptions on February 2 and 3.

Individual investors can subscribe for the offered stocks through Daewoo Securities, the company in charge of the IPO, or through joint undertaking companies Kyobo Securities, Daishin Securities, Tongyang Investment Bank, Samsung Securities, Woori Investment and Securities, Korea Investment Trust Management & Securities, and Hyundai Securities. Investors who do not have a personal account with any of these companies will have to make one.

Meanwhile, the announcement of the Mirae Asset Securities` offer price that was scheduled for Friday has been postponed until after the Lunar New Year’s holidays due to a belated demand forecast analysis.

Wan-Bae Lee roryrery@donga.com