Private offer a Hart-stopper

The future of the Goodman Fielder float remained uncertain last night as Graeme Hart and his Burns Philp team took trade-sale negotiations right down to the wire.

The market has been braced for the cancellation of the float since Friday, when the prospectus for the IPO failed to materialise.

Hart's team spent yesterday poring through a substantial offer made by a partnership of private investment firms, believed to be Boston-based Bain Capital, Australia's Pacific Equity Partners and international investment bank Goldman Sachs.

Sources said the offer was worth A$3.6 billion ($3.84 billion), the Bloomberg news agency reported.

Hart has already said he expects to realise A$2.5 billion by floating 80 per cent of Goodman.

The new offer would allowed Hart to exit completely - leaving Burns Philp with a swag of cash to hunt worldwide for acquisitions.

In his speech at the Burns Philp annual meeting on November 4, Hart hinted a trade sale was still possible, saying "active discussions" were being held with private investors.

At the time, some brokers felt the statement might be game-playing to heighten broker interest in the float.

Brokers in Australia have been sceptical about the amount of value Hart has left in the business after extensive restructuring and cost-cutting. Some felt there might not be much growth potential.

Aware of those criticisms, Hart's team did a round of broker briefings last Wednesday.

"We were told to be ready to go for Friday - we primed our team on Thursday - but we have heard nothing since," one broker said yesterday.

Pacific Equity Partners, which has majority stakes in companies worth more than $2 billion, was one of the private equity firms that expressed interest in Goodman Fielder back in 2003 before the takeover by Hart and Burns Philp.

Bain Capital controls global assets worth more than US$25 billion and is understood to be aiming to take a controlling stake in the private equity partnership.

A New Zealand broker, who asked to remain anonymous, said it would be a great shame if Goodman did not list.

He said the company would provide a stable defensive stock in the food sector, which was hugely under-represented on the New Zealand and Australian stock exchanges.

But as time marched on, the prospect of an IPO before the end of the year - Burns Philp's original aim - was looking less and less likely.

Goodman Fielder was expected to be dual-listed on the ASX and NZX.

The company was created from the spin-off of Burns Philp's ingredients business, which was merged with Hart's NZ Dairy Foods.

Whatever the outcome of the sale, Burns Philp plans to hold on to its lucrative consumer snack foods business, which includes popular brands such as Uncle Toby's.

Diary of an IPO

* September 29: Graeme Hart announces plans to merge New Zealand Dairy Foods with the Burns Philp ingredients business and float a new improved Goodman Fielder on the ASX and the NZX.

* October 6: Burns Philp says it will retain a 20 per cent stake in Goodman. The new company is tipped to have an enterprise value of about $3 billion.

* November 4: At the Burns Philp AGM, Hart says a prospectus will be published on November 10. But he also hints that a trade sale is still on the cards.

* Last Tuesday: Pacific Equity Partners is tipped as a possible buyer.

* Last Thursday: Prospectus fails to materialise, sparking speculation that the float has sunk.

* Yesterday: Burns Philp considers a A$3.6 billion offer from a private equity group consisting of Bain Capital, Pacific Equity Partners and Goldman Sachs.