$300m for Goodman Fielder

New Zealand investor take-up of shares in the A$2.55 billion float of trans-tasman food giant Goodman Fielder is tracking at the top-end of initial hopes, a source close to the deal says.

The source said the syndicate of banks managing the public offer was "very comfortable" it would sell $300 million of the shares on this side of the Tasman.

This compares with October estimates that local demand would be between $200 million and $300 million.

The offer to brokers, their clients and private retail investors closes today.

Meanwhile, fund managers will lodge bids for shares in a book build from the start of next week.

The banks - Credit Suisse First Boston, First NZ Capital and ABN Amro Rothschild - and the company will set the float price and allocate shares according to the overall demand on December 19.

The company is hoping the shares will float between A$1.85 and A$2 each.

This will give it a market value of A$2.45 billion to A$2.65 billion.

The source dismissed as immaterial the lukewarm response from some fund managers to the offer.

"The core theme is still whatever New Zealand does [the success of the float] will be determined by offshore demand," the source said.

Goodman Fielder, which owns the Molenberg, Meadow Fresh and Kiwi brands, is to be spun out on to the New Zealand and Australian stock exchanges from Burns Philp, the Australian food company 54 per cent owned by billionaire Graeme Hart.

Amid some criticism of the prospects of the float, Hart has hit out at investors, warning they might miss an opportunity.

The float would value Goodman Fielder below its peers. He said this should ensure a positive run for the shares on the first few days and steady growth over the longer term.

Some professional investors still harboured concerns yesterday. Tower New Zealand equities manager Wayne Stechman said: "If we end up being a shareholder we are likely to end up as a small shareholder."

AMP Capital Investors equities chief Guy Elliffe said investors were impressed by the quality of management and the presentation on the company's prospects. But the "challenge for investors was determining Goodman Fielder's long-term prospects".

* Goldman Sachs JBWere has warned that Goodman's Meadow Fresh milk brand could be hit by the entry of Australian supermarket chain Woolworths into New Zealand, particularly if it replicates a milk deal it operates in Australia.