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Air NZ selldown completed at $1.65 a share, or $365 million

Tuesday 19th November 2013

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The government sold 20 percent of Air New Zealand at $1.65 a share, meaning there was enough demand from investors to ensure the sale wasn't at a discount to its last trading price.

The government will raise some $365 million selling shares of the national airline and trimming its stake to 53 percent.

State Owned Enterprises Minister Tony Ryall said there was "significant demand from New Zealand retail broking firms and New Zealand institutions, including a number of KiwiSaver participants, which together purchased 186 million of the 221 million shares sold."

The lack of discount in the price means there is scope for the shares to rise when they resume trading tomorrow, given the overhang of the government's holding is reduced and some index-weighted institutions will be looking to increase their holdings.

Brokerages participating in the sale accepted a fee of just 0.35 percent for what was seen as a trophy deal. The shares were pitched at $1.60 and BusinessDesk understands the entire holding was bid at that price by the close of trading yesterday.

The sale was managed by Craigs Investment Partners, Deutsche Bank and Goldman Sachs. It has been completed just three days before the referendum on state asset sales, which starts on Nov. 22.

The stock was rated a 'buy' based on the consensus of six analyst recommendations compiled by Reuters, with a median price target of $1.94. Local institutions have typically been underweight the stock because of its scarcity to date.

Bond Offer: Infratil Ltd, 7.2 year & 10.2 year unsecured unsubordinated bond

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