equamineral holdings ipo - interesting fact

I’ve been playing the market for over 30 years yet I still manage to learn something almost every day.

Here is my new fact for the day.

I received holding statements the other day for the EQH IPO. I looked at the asset, looked at the corporate structure, did a bit of digging around and decided to part with a few dollars in the belief that this may be one of the better IPOs of the year – not that that would be too difficult.

Yesterday their pre-listing documentation was released including the Top 20. Lo & behold sitting at the top of the list with 17.72% of the company is NS Hong Investment (BVI) Ltd. This company is the largest holder & the largest holder of free trading stock with about half the company’s CDIs escrowed for up to 2 years.

I then put my devious little mind to work to think why Colin Ikin would give $900,000 (36%) of a $2.5m IPO to one group. This is even more perplexing when you consider that I heard around the traps that it was very difficult for ‘the boys’ to get the spread away – that’s another $800,000 of stock to 400 names.

I would suspect that a reason for this this group to be given so much stock would be conditional upon them being in the aftermarket upon listing. My next thought was but how much stock could they already buy before breaching the 20% takeover threshold?

And that, my dear friends, is where I received my education for the day. I consulted an old friend & put my conundrum to him. His response - as EQH is a BVI-registered company, it is not subject to the Aussie takeover provisions.

Apparently, should NS Hong Investment (BVI) Ltd want to buy additional stock, they are not limited by the 20% limit.

I managed to get a couple of parcels for spread & after seeing the Top 20 I suspect there will be good support for this IPO even given the current state of markets.

And we won’t have long to wait given that it is listing tomorrow.