Goodman IPO should come in around A$1.90 a share

Australian food group Goodman Fielder's initial public offering (IPO) is expected to be priced above A$1.90 ($2.03) per share and to raise about A$2 billion, a person familiar with the sale said today.

"The book is well covered at A$1.90 per share, so it is going to price north of that," the source said.

"We haven't formally raised the floor, but the message we have given to the market is that we are well covered at A$1.90 and it will be priced upwards of that," he added.

Food group Burns, Philp & Co had offered to sell up to 1.06 billion shares in Goodman between A$1.85 and A$2.00 per shares, targeting up to A$2.1 billion.

The offer opened late on Monday and is scheduled to close on Wednesday.

"The international demand has been particularly strong and last night some of the domestic institutions came in. The road show (for domestic institutions) doesn't end until lunchtime today," the source said.

Last month Burns Philp rejected an offer from a private equity consortium led by US-based Bain Capital Partners, choosing instead to proceed with the IPO.

"My guess is that BPC's stake will be closer to 20 per cent than 30 per cent. The demand is outstanding, and the total shares offered will be close to the upper limit if not all of it," the source said.

The offer is being managed by Credit Suisse First Boston, UBS and Macquarie Bank.

Goodman's offer comes after last week's A$1.4 billion offer from SP AusNet, which was sold at the lower end of the price band. Meanwhile, Spark Infrastructure Fund launched the institutional offer late on Monday, a day ahead of schedule, and is targeting to raise up to A$1.8 billion.

A successful completion of the three offers would take the total Australian IPO tally in 2005 to $9.4 billion. The usually quiet Christmas season has seen active fund raising and sell-downs this year.

- REUTERS