IPO pipeline keeps brokers busy

Nick Stride

Friday 23rd January 2004

Sharebrokers and investment bankers have started the year with full dance cards as a range of companies work toward a Stock Exchange listing.

An almost unbroken 10-month rise in the NZX50 index is encouraging smaller companies to look at raising capital.

"There are six to 12 very realistic prospects the industry is wanting to bring to market," First New Zealand Capital managing director Scott St John, said.

Those who have already gone public with an intention to float include retailer Stirling Sports, auctioneer Turners & Growers, carpetmaker Feltex, rural and financial services company Pyne Gould Corporation (the owner of a 40% stake in listed Pyne Gould Guinness) and children's clothing maker Pumpkin Patch.

Gardening services franchiser Green Acres is pursuing a "backdoor" listing through Selector Group and wireless broadband operator Woosh said last week it would consider a public offer next year. Another possibility is Nelson-based low-cost airline Origin Pacific, which said last year it was looking for equity capital to fund its expansion ambitions.

Many of the banks, accountancy firms and other financial services organisations that have signed up as NZX "approved sponsors" for the secondary AX market already have pipelines of companies looking to list there. PWC Corporate Finance, which is not an AX sponsor, said it was also working on "a couple" of floats.

Some companies aiming to list on the Australian Stock Exchange this year are reported also to be considering a dual NZX listing. However, no larger floats have yet materialised.

Brokers said the best prospect for a major listing was a foreign corporate withdrawing from a local investment as Royal & SunAlliance did last year, leaving Promina behind.

Other possibilities are a float rather than a trade sale of Carter Holt Harvey's tissue division, thought to be worth about $670 million, and a partial float of the merged ANZ Bank New Zealand/National Bank a decision will be made by 2006.

Another call on investors' pockets could be a sale of Edison Mission Energy's 48.9% stake in Contact Energy.

While a sale would be a large one for the market to digest, about $1.6 billion at the current share price, but brokers say bigger deals, such as the sale of Bell Atlantic's Telecom stake, have been done.

Comments from our readers

No comments yet