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Mums and Dads will pay $1.60 at most for Meridian shares

Friday 20th September 2013

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Meridian Energy shares are likely to list at between $1.50 and $1.80 apiece, but the highest price a retail investor will pay if they buy shares in the float will be $1.60, according to the offer documents released this morning.

The low end of that range gives Meridian a market capitalisation of $3.8 billion and the top end puts it at $4.6 billion, meaning the government can expect to raise between $1.9 billion and up to $2.3 billion from the sale of a minority 49 percent of the shares in its largest electricity company.

New Zealand resident retail investors - the so-called 'Mums and Dads' - are being enticed to participate by being offered the opportunity to pay $1 per share as a first instalment and the balance, up to 60 cents a share, in May 2015.

That transforms the forecast yield of 8.4 percent in the 2014 financial year and 9.2 percent in the 2015 year to a 13.4 percent gross yield in the first 12 months of ownership.


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