CanWest's opening show rates well with investors

By STAFF REPORTER

CanWest MediaWorks shares look set to rise further after they provided investors with a profit on their first day of trading yesterday.

The owner of TV3 and TV4 and 28 radio stations hit the stock exchange running, opening at $1.65 to give investors who paid $1.53 in the float an instant 12c a share paper gain.

That was in line with expectations as the share sale was priced to ensure a good on-market performance.

Simon Botherway, of Brook Asset Management, said: "I think it went well and the float was sensibly priced.

"The company's long term prognosis is rosy."

Clark Perkins, the chief executive of lead broker for the float JBWere Goldman Sachs, said: "It has been a long journey."

TV3 first listed in a blaze of publicity in November 1989 but was placed in receivership two years later.

Canadian media giant CanWest bought by stages and built the business up.

The entire business is currently riding a firm advertising market.

CanWest Global Communications considered a trade sale of its New Zealand assets two and a half years ago, but eventually opted for share sale and stock exchange listing.

It retains 70 per cent of CanWest MediaWorks, the company that bought its New Zealand assets.

It did not take the opportunity to sell more shares in an over allotment, which meant a small number of shares were sold, which helped ensure yesterday's market debut.

CanWest MediaWorks chief executive Brent Impey said nothing had materially changed since the CanWest prospectus was prepared.

"I'm confident we will hit forecasts for 2004," he said.

The company's best leading indicators were advertising bookings for the quarter starting September 1 for television and the 12 month plans for radio advertising. These were firm.

Impey said he was not too worried about yesterday's 25 basis point increase in interest rates by the Reserve Ban, which had been foreshadowed over the past three to four months.

"I would expect it would cause a minor slowdown, but I'm not expecting it to have a significant effect," he said.

Perkins said the interest rate environment was now less conducive to raising capital.

"I think we would say the second half for IPOs is likely to be a little quieter."

The CanWest share sale was successfully executed when other floats were being pulled due to a "fatigued" market.

The floats that have gone ahead include Pumpkin Patch, Feltex Carpets, Just Water International, Kingfish and Mike Pero Mortgages. Those withdrawn were Storefund and Colville Equities.

CanWest MediaWorks is made up of the New Zealand assets of CanWest, which were sold down so that the Canadian company could repay debt.