Goodman Fielder listing to go ahead

Graeme Hart has pulled the plug on a private sale of food group Goodman Fielder and will forge ahead with a stock market listing less than a week out from Christmas.

The prospectus - overdue since Friday - was finally lodged with the Australian stock exchange yesterday.

It reveals that Goodman Fielder will have market capitalisation of up to A$2.65 billion ($2.83 billion) and will begin trading on December 19.

The market had been anticipating the cancellation of the float since Friday, when the prospectus failed to appear.

Hart and his team spent all of Monday crunching numbers on a last-minute bid from a partnership of private investment firms - Boston-based Bain Capital, Australia's Pacific Equity Partners and international investment bank Goldman Sachs. The offer was reported to be worth up to A$3.6 billion, excluding Goodman Fielder's debt.

Hart said yesterday that there was not a great financial difference between the value of the private offer and the expected value of the IPO.

Burns Philp expects Goodman, including its A$1.1 billion in debt, to have an enterprise value of up to A$3.75 billion.

As a condition of the IPO Burns Philp has committed to retaining a stake of at least 20 per cent in Goodman Fielder. Hart said it could end up retaining as much as 30 per cent.

The private sale would have allowed Burns Philp to sell-out completely.

Hart conceded there were some tax advantages to retaining a stake but said they were not the main driver behind the decision.

The possibility of delaying the float until the New Year had also been considered, he said. But Burns Philp's advisers had indicated there was enough time to get it away.

The share issue will include a general retail offer, a priority offer for existing Burns Philp shareholders and an institutional offer.

Burns Philp chief executive Tom Degnan will chair the board of directors. He will be joined on the board by Hart and his Rank Group offsider Tim Hardman. Goodman's new chief executive, Peter Margin, will also join the board as will former National Foods chairman Max Ould and New Zealand-based former Foodstuffs managing director Hugh Perrett.

The company has forecast operating profits of A$419 million for the 2006 year and A$466 million for the 2007 year. That equates to earnings per share of 14.1Ac and 16.9Ac respectively.

The retail offer opens on November 25 and closes on December 9.