In a surprise move, Hirepool cancelled its initial public
offering (IPO) of up to $262 million yesterday.
It would have been one of the country's largest IPO's this
Hirepool's 64% majority owner, Australian private equity
company Next Capital, launched the IPO only last week.
Had it been successful, Next Capital and its co-investors had
intended to sell down their collective stakes to 20%-35% of
Industry sources believe large institutional investors had
balked at the estimated $1.10-$1.50 share price range, and
had offered less, prompting Hirepool to pull out.
The IPO's final share price was due to have been announced
However, in a brief statement yesterday, Hirepool Group
advised it had decided not to proceed with its IPO at this
''Given the strength of the New Zealand economy and the
positive outlook for Hirepool, Next Capital Pty Ltd, on
behalf of the Next Capital Funds, have determined that they
are comfortable retaining control of the Hirepool business,''
the company said.
One industry source, who did want to be named, believed
institutional investors had been applying ''pressure behind
the scenes'', to get a share price below $1.10.
''The institutionals were likely being hard on the pricing,
while they [Hirepool] weren't prepared to give it away,'' the
The New Zealand Herald reported yesterday
Australian media had reported mounting pressure to have the
float repriced, perhaps to as low as 90c a share.
Local fund managers confirmed to the Herald that institutions
were putting on pressure behind the scenes before the
''We are being asked to pay a big price for a company that
has been run pretty hard by private equity,''one fund
manager, who requested anonymity, said.
Hirepool at a glance Majority-owned by Sydney-based private
equity company Next Capital and its co-investor Macquarie
They purchased Hirepool in 2006 for $172 million.
In 2012 it bought Dunedin-based competitor HireQuip, after it
went into receivership owing banks $117 million.
Hirepool's 58 outlets around make it the largest equipment
rental company in the country.