StoreFund float untenable, says ASB chief

By PAUL PANCKHURST

Bank chief Hugh Burrett has defended the ASB's actions in the failed StoreFund share float.

The bank owns 80 per cent of barbecue and spa pool retailer The BBQ Factory by default after underwriting the share offer.

Valued at $21.1 million, the retail chain would have been StoreFund's first investment.

Bank management were stung by some media coverage after StoreFund failed to list as scheduled on July 1.

In a message to staff, managing director Burrett conceded it was "somewhat unusual" for the bank to be the owner of The BBQ Factory.

But pressing on with the float was "untenable" because the very low demand for shares meant investors would have lost money when StoreFund listed.

"In our view, the most ethical and appropriate course of action was to withdraw the float."

ASB Bank, the lead manager of the offer, and ASB Securities, the organising broker, have not disclosed the cost of pulling the float.

Some of the $2.3 million of costs in the prospectus were not incurred because of the failure to float.

But many were, including fixed costs for services such as accounting, auditing, legal work and advertising.

There is speculation that unwinding StoreFund's management agreement with North Head Management, a company owned by Leigh Davis, Wayne Walden and Garry Bluett, brought extra costs.

The bank's head of retail banking and marketing, Barbara Chapman, said The BBQ Factory would not be used in cross-promotions such as featuring barbecues or spa pools in bank marketing offers.

One reason: the bank will not be the long-term owner of the chain; the owner of the other 20 per cent is founder Roger Richwhite.