Greenstone IPO at $783 mln set to Australia's biggest for year so far

by Reuters 0

South African-owned insurer Hollard Group plans to raise nearly one billion Australian dollars ($783 million) by listing its Australian unit Greenstone Pty Ltd, a source working on the sale told Reuters, in what is set to be Australia’s biggest initial public offering for the year to date.

The listing will be closely watched by capital markets participants anxious to gauge the strength of an IPO market that has, after a record year in 2014, cooled substantially due to concerns about sluggish economies around the world.

About 58 per cent of Greenstone or 398 million shares will be sold for between A$2.00 and A$2.50 per share, said the source, adding that a prospectus was filed with Australian authorities on Monday.

At the top end of the range, Greenstone, which sells life and pet insurance, would have a market value of A$1.7 billion. The source declined to be identified as the offer details had not been formally disclosed.

The listing is slated for June 16.

The deal is likely to top the A$834 million raised by accounting software firm MYOB Ltd. MYOB closed below its issue price on Monday, underscoring weakness in the IPO market.

Total money raised by Australian IPOs tumbled to 327 million dollars in the first quarter of 2015 from $7.5 billion in the fourth quarter of last year. The average IPO size fell to $30 million from $270 million over the same period, according to Thomson Reuters data.

Goldman Sachs, Macquarie Capital, Citigroup, Deutsche Bank and JPMorgan are working on the IPO and a final issue price will be determined June 11-12, the source said.