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Moa IPO confirmed – shares to be offered at $1.25

Craft beer brewer Moa Beer will launch its $15 million initial public offfering next Friday, offering Kiwi investors the chance to buy its shares at $1.25 each.

Moa's just-released investment statement reveals the company is expecting to raise $15 million from the sale of 12 million shares, or 40.5% of the company, at $1.25 each.

Of those shares, 10.88 million will be issued to new shareholders, representing 36.76% of Moa, and 1.12 million, representing 3.78% of Moa, will be issued to existing shareholders - the Business Bakery, Pioneer Capital and Allan Scott Wines.

The statement also reveals the brewer made a net loss of  $2.85 million in the year to March 2012 and losses are forecast to continue until 2014. Moa will not pay dividends for the period covered by the prospectus.

"Moa is currently a loss-making entity; it is not anticipated to make a net profit in the near term as the business invests in growth,"  the statement says.

In total, 12.8 million shares will be offered to the public, including oversubscriptions to the offer of up to $1 million, which would give Moa an expected market capitalisation of about $38 million after conclusion of the IPO.

The IPO will open on October 19 and close on November 8.

It is intended Moa will then list on the NZX on November 13, giving the local stock exchange a locally-listed brewer for the first time since Lion delisted in 2009 when it was bought by Japanese brewer Kirin.

Moa Beer chief executive and one of its major pre-IPO shareholders Geoff Ross revealed details of the offer at the Basement Bar in Auckland's Britomart precinct.

Guests were offered Moa's breakfast beer on arrival.

A bookbuild to institutional investors and NZX firms had been completed on October 9.

Mr Ross, chairman of NZX-listed Ecoya and the founder of 42 Below vodka, says the response from retail brokers and a range of New Zealand institutions has been extremely positive, with the $15 million offer oversubscribed by 103% – more than double the amount sought  at the bookbuild clearing price.

Moa directors have registered a prospectus and approved investment statement on its website

More than 1500 New Zealand investors have pre-registered their interest in the issue on the website

John Moore, head of equity capital markets at Craigs Investment Partners - joint lead manager for the offer, said the firm now had to wait and see how many of those interested investors placed orders.

The minimum application is for 1500 shares.

More by Georgina Bond

Comments and questions

finally, an alternative to Xero for the financial ignorati to put their money into.

I struggle to believe that any of the serious instos (ACC, NZ Super, etc) will give this a whirl. Are they seriously suggesting that the $6.484m the existing shareholders have put into the business is worth the pre-money valuation of approximately $23m given they only have 2012 annual sales of $2.4m? Can a business like this be worth ten times revenue when it will not generate a profit in the forseeable future? Sounds to me like another case of Geoff Ross building his business with retail punters' money and hoping for the best. He was successful with 42 Below but will it happen again?

It is widely known Independent Liquor is on a craft beer acquisition trail. Given PE-funded businesses are always for sale at the right price, one can only assume that Indepent Liquor thought the price for Moa was just too why would retail investors place a higher value on it? Very strange.

One thing you can rely on... Baker/Ross/Sinclair will do well out of it. Good luck to the rest of the shareholders.

Completely agree with the statement above. The valuation is overly optimistic and ill be surprised if large instos take a significant chunk of the IPO.

Maybe their aim is to be another Charlie


Charlie Brown?

How long until there is a complaint (and associated free publicity) about the sexist imagery in the offer document?

If the FMA has let this prospectus get registered with all of the seemingly irrelevant information and imagery in it, imagine what the MIghty River prospectus could look like - sweaty woman in towels beside steam from geothermal wells, bikini woman water skiing beside hydro dams - the mind boggles about the use of wind turbones and other Mighty River Assets particularly if one assumes they will want to be gender neutral. What will Fonterra respond with ? This could make the NZ share market really interesting and put new life into the IPO market.

One thinks the FMA have walked into a corner here, which shows total inconsistency with all their past and recent guidance notes and practices, and highlights another weakness. Every design house, investment bank and law firm will be saying "What the Hell" ? A new norm has been set which will allow companies a lot more room to move in telling their stories to the investing public and the FMA wont be allowed to back down by a group of very bemused professionals that will point to this as a precedent. After all the FMA are meant to be impartial and consistent !

Or could this be that the penny has finally dropped - the FMA is starting to appreciate that they have killed financial markets by being so anal, nanny state, self righteous, and this is their equivalent of a Reserve Bank Monetary Policy signal of the fact that they have stuffed up and now appreciate that the FMA (and its predecessor) have done enormous "damage and harm" to NZ financial markets, not the good they wrongly think they have achieved - which no one outside of the FMA staff believes.

As for the investment - I'll take a run at it - as with Geof Ross's background of success in 42 below and Ecoya now looking a little more promising, I am sure he will have worked out the exit strategy. But dont worry FMA I wont put all my eggs in one basket, I wont talk to a AFA and I wont be mislead by the pictures. I am amongst the 99 % of NZ'ers who you dont need to design your regulation around not the 1% you seek to protect.

That third party paid advertising in their prospectus is most odd. It doesn't look very professional. This is supposed to be a financial statement with legal implications, not a copy of the Verve magazine found in cafes up and down Parnell.

Big risk by those companies to associate their brand with a boutique beer company investment.

After two years, cash gone, no profits, no dividends.... ahhh... I'll keep my money in Kiwibank.

This is a brilliant investment opportunity - product, brand and distribution - well aligned in a powerfully growing segment.

Take your black hats off.

Thanks mum

Really ?? Wasn't aware beer consumption was on the up.

$38m cap on a turnover of how much again ?? - seriously, way too much blue sky for me, not to mention a rainbow or two.

Is this prospectus for real? By the time I finally get to the historical financial data - on page 116 - after pages and pages of hot chicks, gun ads, info about wearing a suit, and vanity photos of the management - I see the company has never made any money. The forecasts are just lines on a graph going up. Same old story here. Fools, money etc.

Mate, the people who signed off on the design of the prospectus must be dinosaurs. They have just alienated 50% of their market.
But the offer looks like a dog. Wouldn't touch it.

Page two of the prospectus says it all: "Seek advice before committing yourself."
i.e.; you must be mad to invest...

So only $6.5m of real shareholders money has actually gone into this thing. Poof the magic of that cash is now worth $22m. In a company that has never produced a profitable.
FYI they are nothing like Little Creatures - they owned the pubs and had a sensible price.
These guys are more like Paddy McSwindles - West Coast Brewers. Just in different clothing....

All about risk and return, and time put into a venture.

Contrast that with the legions of lawyer QCs now in NZ who charge between $800 to $1600 an hour to promote litigation, ill will, disputes etc. Any risk on their part to make the tens of millions they cream off the unfortunates each year?

If a long established brewery like DB has no profit growth, with all the financial muscle of Heineken behind it, what chance have these guys got? Independent Liquor made its money out of encouraging young drinkers to get high on RTDs, not on its beer brands. The only profits in this deal are for Geoff Ross and his mates.

Geoff Ross and his mates have created wealth, jobs and enthusiasm with 42 Below, Ecoya and now, are offering the public the opportunity (fully disclosed in a prospectus, rather than a backdoor list) to build something for NZ.

Contrast that with the billions of dollars lost by the likes of Brierley Investments and its stable of dogs like Magnum Corp, Mt Charlotte, Molokai Ranch etc.

$16m is but 0.23% of the $7 billion odd put into finance companies with bugger all to show in NZ but a wasteland of losses, uncompleted developments and directors in jail. Here investors can look forward to participating in something truly NEW ZEALAND.

Disclosure : Made good money out of 42 Below.

Say what you want but its gonna take a lot more than branding "NZ" all over the place to get kiwis forking cash out again....

You obviously have not followed the fortunes of ATM, PEB, Diligent and Xero in recent times. The 'punters' are lining up to have a go.

This will be a success.

Kiwis forking cash?

Don't you worry about that as kiwis are reknown for going for punishment after punishment. How else do you explain the obsession with properties which now have many families wondering why they ever bought into apartments, holiday homes, Gold Coast, Fiji etc?

I like my craft beer but Moa does not rate for me, at least on taste. Great marketing t hough.

Within the offer doccuments there are interest free loans to the directors and management to buy shares and a $240k fee paid to the buisness bakery for the services of Mr Ross. Why are they paying $240k to Geoff Ross for his service, he is the CEO isnt he? This is the a p*ss take getting the shareholders to effectively fund the directors into this business. Sounds like Mr Ross has another great marketing plan with no substance. How can any institutions be backing this. That marketing document I wouldnt call it a prospectus shows what a joke the NZX is. Also who comes up with the valuation of the shares and the business........ pie in the sky comes to mind.