UPDATED: Wall Street bank buys Meridian Energy shares
Bank of New York Mellon Corp, which has $US1.5 trillion of assets under management, has bought 3.98% of Meridian Energy after New Zealand's government sold 49% of the nation's largest energy electricity retailer and generator in an initial public offering this month.
Newton Investment Management, a subsidiary of BNY Mellon, which is also the world's largest custody bank with $US27.4 trillion in assets under custody, bought 102 million instalment receipts in the days following the stock listing on Tuesday, according to a substantial security holder notice posted on the NZX today.
Meridian Energy's instalment receipts [NZX: MELCA] debuted at $1.08 on Tuesday after tepid demand in the initial public offering saw the stock sold at $1.50 a share, the bottom of the indicative range of $1.50 to $1.80, with a smaller-than-expected pool of investors. The stock slipped 0.9% to $1.09 today.
The government offered the Meridian shares in instalment receipts to sweeten the offer, with $1 upfront and the promise of full entitlement to dividends, and the remaining 50 cents in May 2015.
While Newton Investment Management's actual share of Meridian amounts to 3.98% based on the total shares on issue of 2.563 billion, it currently holds 8.1% of the free float (minus the government's stake).