Share float pricing just too sharp for some

The New Zealand Exchange will look at whether brokers need guidance on "bookbuilds", after Australian concern over the Just Group share float.

Shares in Just Group - the company behind the Just Jeans retail outlets - were offered to Australian and New Zealand investors before the company listed on the Australian Stock Exchange in May.

The ASX has publicly criticised Goldman Sachs JBWere in Australia regarding the public offer, and is working on a guidance note on best practice.

New Zealand Exchange general counsel Elaine Campbell said the NZX would look at the Australian report, and whether brokers here needed guidance.

Goldman Sachs, which ran the bookbuild for the Just Group float, initially offered institutional investors shares at A$2.25-A$2.70, but the final price was A$2.10.

The criticism stemmed from Goldman Sachs' next move, which was to offer selected clients 15Ac for each share they bought - effectively discounting the price for these investors.

While the broking firm did not break any rule, the ASX was not pleased.

In bookbuilds, institutional investors bid for quantities of stock before a final price is set.

Brokers are not permitted to offer the same security to different investors at different prices.

Goldman Sachs JBWere's co-chief executive, Craig Drummond, told the Australian Financial Review the firm accepted there were concerns about the bookbuild process.