$1.60 price tag for courier's shares

By PAUL PANCKHURST

Courier company Freightways yesterday unveiled a price of $1.60 per share for the biggest initial public offering of a New Zealand company since 1999.

That was at the low end of an indicative price range of $1.55 to $1.90.

Not everyone was happy, though, as demand outstripped supply.

Some sharebrokers complained of receiving only 15 per cent of the allocations they had sought in last week's "book build", the bidding process to match supply with demand and set the price.

Andrew McDouall, of McDouall Stuart Securities, said he had asked the stock exchange to review the process of book builds.

He believed outcomes such as yesterday's wrecked the sharemarket's credibility with retail investors - invited in, then locked out.

However, a spokesman for the co-lead manager of the issue, First NZ Capital, said the complaint was "confused" as retail investors were ending up with the bulk of the stock.

Freightways will raise $141.5 million through the issue, giving the company a market capitalisation of $195.3 million.

The price of $1.60 per share gives a forecast gross dividend yield of 10.5 per cent for the year to June 30, 2004.

The company said the demand from institutions, broking firms and other investors was the equivalent of 360 per cent of the shares on offer in the book build.

Institutions in Australia and New Zealand took 21.2 million of the 77.5 million shares.

The remaining 56.3 million will go to retail investors and to broking firms for sale to retail clients.

A final 10.9 million shares - not part of the book build process - will go to holders of Freightways' preference shares.