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Australia’s biggest department store chain Myer Targets $2B For IPO

By Amarendra Bhushan for CEOWORLD Magazine Updated:September 28, 2009

Australia’s biggest department store chain Myer on Monday said it would seek up to 2.34 billion dollars (2.02 billion US) via an initial public offering in November.

In launching its prospectus, the private equity-owned Myer Holdings Ltd. said the share price was expected to be between 3.90 and 4.90 dollars when it lists on the Australian Securities Exchange.

The listing will be the largest in Australia since the onset of the global financial crisis and is set to test the appetite for IPOs Down Under.

“Today is the beginning of a new journey for Myer, and I am personally very excited about the future for this business and about inviting new shareholders to be part of that future,” chairman Howard McDonald said.

So far, the company, which was bought for 1.4 billion dollars by a TPG consortium in 2006, has been hit by some 140,000 requests for its prospectus.

The prospectus said the share sale would raise at least 1.94 billion dollars and give it a market capitalization of between 2.28 and 2.77 billion dollars.

The float is aimed heavily at retail investors, Angus Gluskie, a portfolio manager at White Funds Management in Sydney, told Dow Jones Newswires.

The offering is expected to be divided equally between retail “mum and dad” investors and institutions, but analysts said institutional investors may be cautious.

“It’s very opportunistic at the moment. You are coming off a fairly strong tailwind from (government) stimulus and low interest rates,” said Karara Capital portfolio manager Akshay Chopra.

The IPO market across Asia, particularly in Hong Kong, has heated up in recent weeks, but not all have fared well in a signal that investors have limited appetite for overly rich IPO valuations.

Myer will be Australia’s largest IPO since drilling services company Boart Longyear Ltd in April 2007.

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