Macquarie plans A$1b float

SYDNEY - A group led by Macquarie Bank, Australia's largest securities firm, plans to raise about A$1 billion ($1.1 billion) selling Dyno Nobel shares, six months after buying the explosives maker, people familiar with the plan said.

Macquarie's securities unit and Credit Suisse Group will manage the sale to domestic and overseas investors, said the three people who have direct knowledge of the proposal and didn't want to be identified before the official announcement.

The explosives maker, which has Australian and North American assets, will be listed in Australia in late March, they said.

Sales of explosives are surging as mining companies such as BHP Billiton boost output to sell to China, where copper demand is forecast to double by 2010.

Sydney-based Macquarie Bank is taking advantage of strong demand for new stock as Australia's A$860 billion economy enters its 15th year of expansion.

"The economy remains fairly solid and current market conditions would be conducive to any quality offerings," said Matt Williams, who helps manage A$7.4 billion at Perpetual Investments in Sydney.

The benchmark S&P/ASX 200 Index has climbed 19 per cent in the past year, closing at a record high of 4866.1 on January 17.

Macquarie led the investor group in buying Dyno Nobel Holding for US$1.7 billion ($2.5 billion) in September to help its client Orica sidestep regulatory hurdles in the acquisition of the company.

The group then sold Dyno Nobel's European, African and Latin American operations to Orica, the world's biggest explosives company, for US$685 million.

Orica's acquisition of all of Dyno Nobel's business would have run into difficulty with anti-trust regulators, UBS analyst Matthew Reynolds noted in a report to clients dated July 12. A combined Orica-Dyno Nobel would have had a monopoly in Australia and as much as 65 per cent of the US market, he said.

Macquarie Bank "had no intention of holding the assets on their balance sheet," said John Heagerty, an analyst at ABN Amro, who rates the firm a "buy".

Details on the holdings of Macquarie Bank and the other members of the investor group in Dyno Nobel were not disclosed.

Elizabeth Rudall, a Melbourne-based spokeswoman for Credit Suisse, declined to comment and Matthew Russell, a spokesman for Macquarie Bank in Sydney, did not return calls seeking comment.

Dyno Nobel traces its roots to 1865 and Alfred Nobel, inventor of dynamite and founder of the international prizes that bear his name.

Sydney-based Dyno Nobel has been acquiring assets overseas, including three nitric acid plants and two ammonium nitrate plants in Canada for an undisclosed sum in December, according to its website.

Macquarie Bank, which bought Dyno Nobel from Stockholm-based buyout firm Industri Kapital, had said it may sell shares in the business in an IPO in the first half of this year.

Macquarie Bank is the world's largest non-government manager of infrastructure, including airports, toll roads and radio transmitters, and has assets and funds of at least A$112 billion. The bank typically bundles assets into separate funds from which it earns management fees.

The firm ranked number two in arranging share sales in Australia and New Zealand in 2005, according to Bloomberg data.

- BLOOMBERG