Last-minute rush for MRP shares

Sharebrokers were yesterday reporting a last-minute flood of investor interest in Mighty River Power (MRP) shares before the offer closed at 5pm.

Although not officially allowed to talk about the offer to the media, brokers contacted by the Otago Daily Times said investors had waited until the last minute to decide whether or not to take up their pre-registration orders.

There was some scaling back, but investors were feeling more confident of the offer's success.

The Government is selling down 49% of MRP, with the expectation that state-owned Meridian will be the next to be partially floated later this year.

The Wall Street Journal reported yesterday the Treasury had called for investment banks to tender for leading roles in the partial sale of both Meridian and Genesis Energy.

Grant Thornton New Zealand partner Peter Sherwin said indications were that the uptake for MRP shares would be lower than the Government first planned.

''If this comes true, the sabre-rattling by the Greens and Labour may have wiped as much as $400 million off the value of the MRP listing by damping enthusiasm of small investors.''

Potential investors might hold back due to confusion about the future of the power industry, uncertainty whether MRP would stag at a higher price and a fear the price would go down upon listing, he said.

The lack of take-up of shares would dampen the listing price, which was more likely to be about $2.25 per share rather than the earlier expected $2.80.

The Green and Labour parties might have scored political points but they had slashed the Government's cash investment to fund health, education and infrastructure programmes, Mr Sherwin said.

Pricing for the shares takes place on Wednesday. Allocation and trading start on Friday.

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