Crunch time for Hart on Goodman IPO

Billionaire businessman Graeme Hart will decide today whether to sell Goodman Fielder to a private equity group, rather than proceed with a $3 billion public float of the baking, spreads and oils business.

Investors had expected to see a prospectus on Friday night, but Mr Hart, who is the major shareholder in Burns Philp -- Goodman Fielder's parent -- delayed his decision over the weekend while he weighed the merits of the float or a rival private equity bid from Pacific Equity Partners (PEP) and Bain Capital.

Mr Hart told shareholders at a Burns Philp annual meeting this month that the company was in active discussions with potential third party buyers that could provide an alternative to the initial public offer (IPO).

Normally, the public market would be able to pay far more than a private equity bidder, but bankers quoted in Australian media said this deal was very tight.

Bankers are hoping to raise nine-times earnings before interest, taxation, depreciation and amortisation from the public, which would value the company at roughly A$3.8 billion ($4.08 billion).

At A$4 billion, a sale to Australia-based PEP and US-based Bain would be the largest private equity sale in Australian history.

The IPO is facing some resistance from domestic retail investors who remember the years, before Mr Hart took over the company, when Goodman Fielder was a perennial underperformer.

The IPO route would leave Mr Hart holding 20 per cent of the company.

- NZPA