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I think it is worthwhile to comb through in detail the MYOB IPO prospectus.
I have gathered the following:
1) All noteholders will be guaranteed allocation of IPO shares (provided they have done the necessary online lodgement as per notice to be distributed) at 2.5% discount off the Final Price
2) There is no General Offer - and I reckon the Retail Broker Firm shares allotment would be pretty limited (with most going to local and overseas institutions - they are also likely to hold positions unlike retailers looking for a stag) so buying notes now would be a sure way of getting IPO. Limiting retail shares would be a sure way of keeping prices stable, as retailers reather buy when the price goes up rather than when seeds of doubt is planted.
3) Bain Capital the private equity owner of MYOB would not be selling any shares in the IPO and would emerge as their substantial & majority shareholder post-IPO with 54% and the interesting bit is that they cannot sell down their shares held under escrow before FY16 results unless MYOB's shares trade at least 20% higher than the Final Proce over 20 consecutive trading days - to me that's a confidence vote and that Bain themselves believe in the long term prospects of the company
4) I also believe that brokers will also do what they do- pre-IPO they will say it is expensive (true, but expensive is all relative) just as they did for Heathscope (HSO) and Medibank (MPL) but 6 months later after a successful IPO, they re-rated them higher. HSO IPO at $2.10 , all citing expensive but it is now over $3 and Goldman says it is worth $3. The truth is broker firms are looking to buy up and accumulate and do not wish to see the bull run through the door at first bell.
5) The risk is that you do not know what the Final Price is when you subscribe, you can only hope that the bidding institutions and Lead Managers have some sense as seeing the IPO price at the start falling below the Final Price is not the outcome everyone desires for a high profile IPO.
6) All discussion re: Xero is just "noise"; we know its a duopoly, just because we have Telstra does not mean TPG cannot thrive and prosper , but the key thing is that MYOB has strong free cashflow and already making profits.
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