Shakey's Initial Public Offering: The Dilemma of Investing

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Case

Reference no. 9B19NC021

Simplified Chinese language

Subject category: Finance, Accounting and Control

Authors: Maria Theresa Manalac; Stefanie Mae Margaret Jakosalem; Sandeep Puri

Published by: Ivey Publishing

Originally published in: 2019

Version: 2019-11-20

Revision date: 28-Jan-2021

Length: 17 pages

Data source: Published sources

Topics: Valuation; Discounted cash flow; Comparable firm multiples; Initial public offering; Leveraged buy-out; Finance; International

Share a link: https://casecent.re/p/174217

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Abstract

This is a Simplified Chinese version. In early December 2016, a student member of the Philippine Fund of the finance lab at the Asian Institute of Management was wondering whether to invest in the initial public offering (IPO) of Shakey's Pizza Asia Ventures Inc (Shakey's). Shakey's was the market leader in the full-service chain restaurants industry in the Philippines and would be the fourth company to be listed in the Philippine Stock Exchange. The IPO period was from December 2 to December 8, 2016, and the company was offering a total of 306 million shares. The student member must decide whether to buy Shakey's stock based on her estimate of the intrinsic value of Shakey's relative to the IPO price, Shakey's strategy and prior performance, and the attractiveness of the food service and restaurant industry.