Freightways shines on listing debut

By ELLEN READ

Courier company Freightways delivered the goods for investors yesterday, listing on the stock exchange at $1.75 - a 15c or 9 per cent premium to its offer price.

The company's share offer raised $141.5 million - from 88.4 million shares* issued at $1.60 each - making it the biggest float of a New Zealand company since Contact Energy raised just over $1 billion in 1999.

By the close of trade, Freightways had settled back to $1.72 and 3.8 million shares had changed hands.

"[$1.75] is pretty much where we thought it would list. It was priced at $1.60 to make sure there was good demand but the company's worth more than that," said Forsyth Barr head of research Rob Mercer.

Freightways had a proven record, was on track for earnings growth and its shares were forecast to carry a gross dividend yield of 10.5 per cent for the 12 months to June next year, he said.

Mercer expects the share price to track higher to $1.85 to $1.95 over the next three months.

"It's a good-quality business with a reasonable outlook," he said.

Yesterday's listing ended years of private ownership for the Auckland-based company which owns the New Zealand Couriers, Poste Haste and Sub60 brands. Under a different guise, the company listed on the stock exchange in 1971 and traded for 14 years before being privatised.

ABN Amro, which took over Freightways as part of the purchase of Ausdoc Group last year, returned the the company to market, a move applauded by NZX chief executive Mark Weldon, who said it was important for the local market that private equity took positions in companies and then "exited them in a timely manner".


* CORRECTION: In the original version of this report, we stated incorrectly that Freightways issued 10.9 million shares.