myer broker firm allocations, page-11

Myer initial public offering prices at $4.10 a share

THE Myer float has closed with an issue price of $4.10 a share, near the low end of the range and after strong demand.

The result means about $2 billion in equity will be raised in Australia’s biggest initial public offering in more than two years.

Another $400 million in equity will be held by management and the Myer family.

TPG, a US private equity group, is expected to exit the stock but final decisions are still to be made.

The final offer price is at about 15 times earnings and strong retail and institutional demand will support the price when it opens on Monday.

The initial guidance for the IPO was between $3.90 and $4.90 and a fund manager said earlier today that that range had narrowed to between $4 and $4.20 a share.

Myer is Australia’s second-largest department store chain and competes with bigger rival David Jones, which has a market value of about $2.8 billion.

The two-day institutional bookbuild process, a silent auction in which institutions applied to purchase stock at a price they nominated, followed a three-week retail offer open only to holders of the Myer One loyalty card, who put their hands up for more than $1 billion worth of stock.

Analysts including UBS have said that Myer should be priced at the lower end of the offer range, putting it at a discount to David Jones, which has lower debt as a proportion of earnings and is considered more likely to upgrade profit forecasts this financial year.