Dick smith would definitely be in the "top 5" for use of 'iconic' I'm sure... ;)
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Not sure if it has already been shared, but for those who are following:
"The brokers said more than $NZ200 million of retail bids had been received"
Read more: http://www.afr.com/street-talk/tegel...#ixzz463iKTZZ3
Ok, so either all those that were dissing Tegel were actually putting in big orders or they just weren't convincing enough:).
GOTCHA!! Tegel priced at $1.55 http://www.nbr.co.nz/article/tegal-s...ge-ck-p-187832
Full article here: http://www.theaustralian.com.au/busi...696e9c1afaa1fd - if you don't subscribe to NBR.
One of New Zealand’s most familiar consumer brands, the chicken producer Tegel Foods, will list on the stockmarket next month at a price of $NZ1.55 per share after investors supported the deal at the lowest end of the valuation range.
This newspaper’s BusinessNow blog revealed the price on Tuesday.
As this column also reported, Affinity Equity Partners, an Asia-focused private equity firm and the majority owner of Tegel, was faced with two options after a $NZ299 million ($270m) bookbuild concluded yesterday morning: take the floor price or book a higher profit on its sell-down with the slightly higher valuation of $NZ1.75, or 8.2 times forward earnings. At that level a number of top investors declared they would walk.
After a lengthy period of deliberation with the IPO’s joint lead managers, Deutsche and Goldman Sachs, Affinity plumped for the cheapest price, in an effort to avert a poor performance post-listing, as well as lock in a high-quality *register dominated by long-term investors. As a result, a number of fund managers suffered heavy scale-backs on their allocations, paving the way for a strong debut on the stock exchange.
Yet while Affinity spent hours pondering the final deal price, fund managers’ reluctance to climb far above the floor price was evident weeks ago. As this column has stressed, Tegel’s comparatively weak growth prospects always presented the greatest hurdle to a lofty valuation, with the deal’s appeal centering principally on the company’s high-yield, iconic brand and respected management team.
Tegel’s lengthy ownership by private equity firms — Affinity purchased the poultry business for $463m in 2011 from Pacific Equity Partners, which had held it since 2005 — also helped stifle appetite for an expensive valuation.
In the past few years shares in a string of companies floated by buyout firms have headed south, denting enthusiasm. Dick Smith’s spectacular collapse in February ranks among the worst offenders.
Nonetheless, Tegel’s solid earn*ings, delivered chiefly from its domestic market, where it ranks as the country’s leading poultry producer, garnered support at the low end of the 8-9 times forward earnings valuation range. Retail investors also flocked to the deal, offering over $NZ200m in binding commitments. Tegel will list on the stock exchange with a market capitalisation of $NZ552m.
Hectorplains;
Thank you for posting the full article.
Will be interesting to see how much I will be scaled.
Applied for equal amounts for the wife and me via Craigs.
The news is on the NZ Herald now.
Percy, so you're probably one of those that the company said are “long-term, high quality investors” whom they wanted to keep :)
I'm just happy that the amount I allocated is right to the cents. Giving this a 2 year horizon. GL to us all again.