Greenstone IPO, page-29

Plenty of sceptics on this one.
From The Australian


'Much of the talk among investors this week is likely to remain centred on the float of the life and pet insurer Greenstone, as its retail book build starts tomorrow.


The disparity between Greenstone’s cash and reported earnings of the business is still a major point of contention.

The insurance distributor is coming under increasing pressure to reduce the size of its IPO from its current $797m minimum and price the deal at the bottom end of the range, which is $2 to $2.50 a share, equating to 15.5 to 19 times its forecasted annual net profit.


There are major fund managers in the market who say they would support the deal on the basis that the IPO was priced at the bottom end of the range ahead of its June 11 book build and mooted listing five days later.


Some say they plan to shun the offering due to the regulatory risk to the life insurance and financial planning industry.

They argue that the deal should be valued by its cash earnings, rather than its reported earnings, which are almost twice as high and include trail commissions that may not eventuate."