It appears that advisers behind the float of McGrath Estate Agents may have defied their critics.
There are suggestions they are planning to accelerate the timetable of the real estate agency’s initial public offering on the back of what is said to be strong investor demand. It is now understood that the float has attracted strong interest from Australian institutions and that the book is already well covered.
This is likely to see the bookbuild for the deal brought forward by two days to November 10 before its listing early next month, which has so far been scheduled for December 9.
Management meetings have been held in Hong Kong and Sydney, and will continue in Melbourne today. It is understood the deal has had a better reception from local fund managers than those offshore.
Doubters had been questioning whether the deal would take place because of the cooling Sydney and Melbourne housing markets and a fall in auction clearance rates from about 80 per cent to almost 60 per cent in some markets since sentiment has shifted.
They also believed that a move by the veteran real estate agent founder, John McGrath, to cash out in part could signal that the best could be over for Australia’s residential property market for a while.
The business is owned by founding chief executive John McGrath, chief operating officer Geoff Lucas and some senior real estate agents and all will be selling up to a third of their interests, subject to escrow for two years.
The company is selling shares at between $1.80 to $2.25, taking the market value of residential real estate chain once listed to between $254m and $295.7m. The IPO of what is one of Australia’s leading agencies is set to raise between $121.2m and $135.2m.
It comes as sheep and beef live exporter Wellard Group priced its IPO at a range of $1.39 to $1.68 per share, equating to 12 to 14.5 times forecast net profit. The pricing will see the company’s market value range between $556m and $672m, as it seeks to raise between $333.6m and $403.2m ahead of its listing next month.
Elsewhere, investors anticipate private equity firm Ironbridge to retain a substantial slice of Eclipx, the fleet management and car financing group it listed this year. A parcel of the shares owned by Ironbridge lapse from escrow tomorrow. At the current share price that would equate to a $331m selldown. However, sources said Ironbridge intended to hold onto the bulk of its stake and will offload a fraction largely to boost liquidity.
Shares in Eclipx, previously known as FleetPartners, closed down 1.4 per cent at $3.40 yesterday. The company, which was ushered on to the ASX in April by Citi, Credit Suisse and UBS, unveiled a net profit in May of $23.8m.
This article first appeared in The Australian Business Review.