It will be an absolute ripper if it lists at say NZ$1.50
Push to lower CBL price
BRIDGET CARTER & GRETCHEN FRIEMANN - THE AUSTRALIAN 2 HOURS AGO
Fund managers are expected to lobby the $NZ350 million ($317m) insurer CBL to offer shares at the lower end of its pricing range because of choppy market conditions.
The company lodged its product disclosure statement yesterday ahead of an October 13 float in Australia and New Zealand.
The Auckland-based company prides itself on finding profitable, unconventional insurance lines.
It makes most of its revenue from products relating to decennial liability, a form of liability imposed by law on construction contractors for collapsed buildings, and also surety bonds.
Its hopes for 38 per cent earnings growth next year are pinned on new products, international markets and joint venture partnerships.
Between $NZ123m and $NZ132m will be raised, based on an indicative price range of $NZ1.45 and $NZ1.85 per share, and the company will list through advisers UBS and Forsyth Barr.
Chaired by Sir John Wells, CBL’s market value will be between $NZ324m and $NZ389m.
Majority shareholders and senior management plan to sell up to 15 per cent of their interests.
The company writes business in 25 countries on four continents, and is forecasting gross premium revenue in excess of $NZ330m this year on a pro forma basis.
For the 2014 calender year, CBL reported $NZ36m in operating profit on gross written premium of about $NZ240m.
Its priority offer opened yesterday ahead of its September 17 bookbuild.
Meanwhile, investors believe Baby Bunting will probably price at the higher end of its range.
Morgan Stanley analysts have valued the IPO prospect at between $145.6m and $191.1m, or 16 to 21 times earnings.
The baby goods retailer plans to grow profit by rolling out more stores in what analysts describe as a defensive retail segment and a fragmented, under-invested category.
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