Australia’s largest IPO so far this year follows a record 2014 for floats by market value
SYDNEY—Australia’s biggest initial public offering so far this year got off to a flying start Monday, possibly encouraging other companies seeking to raise funds as the local stock market tests seven-year highs.
The outlook for Australia’s IPO market, however, remains murky as the country’s slowingresources boom pushes up unemployment and tests consumer confidence.
Shares in accounting software provider Myob Group Ltd. made their debut on theAustralian Securities Exchange at 3.91 Australian dollars (US$3.06) each, a 7% premium to their IPO price of A$3.65, giving the company a market value of around A$2.29 billion.
At 5827 points, the nation’s main stock-market index has gained more than 9% this year, buoyed by record-low interest rates and continued signs of a U.S. economic recovery. The index, however, has struggled in recent weeks to hit the psychological 6000 mark, a level it hasn’t breached since 2008. Last year was a record for IPOs in Australia by value, with A$26 billion of equity listed through 74 floats. Many market watchers doubt that 2015 will be as strong.
“Myob’s debut’s a positive for the Australian IPO market, although there is also been some negative influences and people are a lot more cautious this year,” said Evan Lucas, a Melbourne-based strategist at broker IG.
“It is harder to get away with demanding high premiums but if you’ve got something to be excited about you can still get some pretty strong backing,” Mr. Lucas said.
Broader global demand for public floats will get another big test in the coming months, when Japan Post Holdings Co. and its units are expected to raise a collective $10 billion to $20 billion in an IPO deal that is set to be among the biggest ever.
Myob’s A$3.65-a-share IPO price was near the midpoint of an earlier indicative price range of A$3.00-to-A$4.00 and provides a paper profit for biggest shareholder Bain Capital LLC.
The U.S. private-equity firm, which bought 95% of Myob in 2011 for about A$1.2 billion, didn’t sell any of its shares in the offering. It currently has a 57.7% stake in the company.
Myob—which stands for Mind Your Own Business—claims to have a 60%-to-65% share of the accounting software market for small- and medium-size businesses in Australia and New Zealand. Its debut offering was the biggest in Australia since the A$5.68 billion (US$4.45 billion) float of health insurer MediBank Private Ltd. in November.
Lorna Jane, a retailer of women’s fitness apparel, and bed-linen chain Adairs Group might also be listing candidates this year, professional-services firm Deloitte said in a report in March.
