MacBank to clean up as Dyno boomsBlair SpeedyApril 06, 2006HUGE...

MacBank to clean up as Dyno booms
Blair Speedy
April 06, 2006
HUGE investor demand for shares in explosives maker Dyno Nobel will allow Macquarie Bank to sell its majority stake in the company for up to $46 million more than it expected.

Sale managers Credit Suisse and Macquarie Bank had been swamped by more than 150 institutions wanting a piece of the action by the time the $1 billion initial public offering closed yesterday.

A spokesman for Dyno Nobel said the indicative price range offered to institutions would probably exceed the upper end of the bookbuild range of $1.89 to $2.27 a share. "It looks like the increase is going to be in the range of 10c," he said.

The increased selling price means up to $46.4 million in gravy for Macquarie Bank, which is selling 464.6 million shares, or a 57 per cent stake, in the Sydney-based company through the IPO process.

Dyno will have a total market capitalisation of up to $1.93 billion when it lists on the Australian Stock Exchange tomorrow.

Dyno Nobel is the world's second biggest explosives maker after Australia's Orica and supplies explosives and related services to mining and building companies. The Dyno float has managed to capture enormous investor interest in spite of base metal prices being near record highs and mining companies coming up against labour shortages as they seek to boost output.

The strength of the Australian share market and a weaker Australian dollar have spurred interest in the float, as more than 80 per cent of Dyno Nobel's earnings are generated in North America.

China's seemingly insatiable demand for mineral resources has led miners such as BHP Billiton and Rio Tinto to increase their consumption of explosives and other mining consumables.

A consortium including Macquarie Bank and nine others bought Norwegian-based Dyno Nobel Holding ASA from Stockholm-based private equity company Industri Kapital AB for $2.35 billion in September last year.

The consortium group then sold Dyno's European, Asian, African, Middle Eastern and Latin American units to Orica, the world's largest explosives maker, for $900 million.

Dyno's operations in Australia, New Zealand, Canada and the US will form the new Australian-listed entity, in which the Macquarie consortium will retain a 43 per cent stake after the IPO.

Macquarie Bank itself will hold about 4 per cent, while Dyno Nobel management will have a 1per cent stake.

The funds raised under the offer will be used to redeem several securities held by existing shareholders, repay debt and pay the costs of the float.

Dyno Nobel chief executive Peter Richards said earlier this month that the float would also let the company pursue growth opportunities, including a rapid re-entry into markets in Asia and Latin America.

The company plans to spend $US90 million over two years to expand output at its plants in North America and Australia.