By Bernard Hickey
Mighty River Power and its shareholder the Government have registered their offer document for an Initial Public Offering and float on the NZX, including an indicative price range of NZ$2.35 to NZ$2.80 per share and plans to offer retail investors one bonus 'loyalty' share for every 25 shares they hold on to for 25 2 years.
That price range implies an indicative market capitalisation of NZ$3.29 billion to NZ$3.920 billion, which means the government could raise around NZ$1.8 billion of the NZ$7-9 5-7 billion target for its 'Mixed Ownership Model' SOE float programme.
Also included in the offer is a "participating Iwi offer", through which a pool of NZ$65 million of shares, representing approximately 1.8% of the shares on issue, has been reserved for allocation to iwi that have unsettled Treaty of Waitangi claims. Shares that aren't taken up by Iwi will be offered for sale in the general offer.
And in the general offer the final price will be set on May 8 after the retail offer has closed and an institutional offer has been held through a book build process.
The loyalty scheme is available only to New Zealand retail investors. It is not open to institutions or overseas investors.
The offer is expected to open on April 15 and be open until Friday May 3, one week before the company is expected to list on May 10.
The government is selling 686 million shares or 49% of the company in the float.
Retail investors can buy a minimum of NZ$1,000 of shares with multiples of NZ$100 above that.
Applications from New Zealanders of up to NZ$2,000 from New Zealanders will not be scaled. If there is scaling back, those who pre-registered (440,000) will receive 25% more shares than those who did not pre-register.
The bonus share offer is for up to a maximu of 200 bonus shares for each New Zealand applicants.
The offer document included a long list of risks, including the potential reduction or closure of the Tiwai Pt smelter.
"If the Tiwai Point Aluminium Smelter were to significantly reduce its electricity consumption or cease consumption altogether, the resultant drop in demand could lead to a sustained reduction in electricity prices in general," the offer document said.
Institutional investors will pay the same price as retail investors. Allocations will be set after May 10.
Mighty River is forecasting a dividend of NZ13c a share next year, while the float is estimated to be costing up to NZ$48.7 million.
(Updated with more detail from offer document, corrects amount to be raised from MOM programme to NZ$5-7 bln from NZ$7-9 bln, corrects first paragraph 25 years to 2 years)
Additional material added by David Hargreaves
16 Comments
At this price you need approx $5000 worth to make enough margin to make it worthwhile investing so likely $2000 per person will be allocated, and then you would need to buy another $3000 worth after listing. Somewhere around $2.20 per share would be a good start, buying at below issue price.
Wouldn't you just feel more comfortable about hanging around if they incorporated the loyalty share reducing the offer price to say 1.90p/s to 2.15p/s and scaled up the cutoff availability. I know I would, why the hell these guys should suddenly care about loyalty to locals is beyond me.....given their record on the matter.
When you don't want em to smell a rat ...don't give em a rat to smell....!
No worries Xing....control over the share price and the divs will always be in the heads of the fools in the Beehive...they can change colour at the drop of an election....the question to ask yourself is: Do I believe this govt will remain in power past 014....past 017....etc.?
Sooner or later the socialist mush will be back...and the SOE share value will reflect that risk...and the divs will remain close to the NZ govt bond divs...or the Beehive buffoons will be losing votes as peasants realise they are feeding fat divs to govt mates who own the shares..
Hope that helps Xing....if not....look back to see what Clark and Cullen did to the AIA share price so they could keep the support of the Marxists in Auckland.
Where are the bonus shares coming from ... ? If new issue then of dubious value as they imply dilution of existing shareholders. Are the Crown going to hold back some from the initial offer - important to know if trying to determine the value of the so called bonus shares.
Does the offer document cover risks with respect to outstanding Treaty claims issues?
http://www.nzherald.co.nz/mai-chen/news/article.cfm?c_id=1503200&objectid=10869635
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