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Tegel shares priced at bottom of range

Bookbuild prices shares at $1.55

Tim Hunter
Wed, 20 Apr 2016

See also: Investors ponder whether Tegel 'can do a Scales'

Shares in chicken producer Tegel will sell at $1.55, the bottom of the indicative range after the bookbuild was completed yesterday.

Tegel is floating on the New Zealand and Australian stock exchanges in an initial public share offer by its owners, led by private equity firm Affinity Equity Partners.

A spokeswoman for the company said the offer was heavily oversubscribed, with strong demand from New Zealand, Australian and international investors.

Although the book was fully covered at a price higher than $1.55, she said the company chose to give preference to “long-term, high-quality investors.”

The broker firm offer, in which retail investors confirm their orders for stock, opens today.

The company is due to list on May 3.

Tegel had offered its shares for between $1.55 and $2.50, aiming to raise gross proceeds of $299-344  million.

The offer price implies a valuation of Tegel of $550m and gross proceeds of $299m.

Under the terms of the IPO, Affinity’s post listing stake of 45% will remain in escrow until Tegel releases its results for the year to April 30, 2017. However, Affinity may sell up to half its stake earlier if Tegel’s results for the six months to October 23 have been released, and the volume weighted average share price in the following 10 days is at least 20% higher than the offer price.

At an offer price of $1.55, Tegel’s shares would have to be above $1.86 for that condition to be satisfied.

The IPO is jointly lead-managed by Goldman Sachs and Deutsche Bank, with First NZ Capital lead managing the New Zealand offer.

Tim Hunter
Wed, 20 Apr 2016
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Tegel shares priced at bottom of range