MRP success boost for next asset sale

Forsyth Barr brokers (from left) Suzanne Kinnaird, Haley Van Leeuwen and Tom Bliss watch the...
Forsyth Barr brokers (from left) Suzanne Kinnaird, Haley Van Leeuwen and Tom Bliss watch the listing yesterday of Mighty River Power shares. Photo by Gerard O'Brien.
The success yesterday of the Mighty River Power listing on the NZX would provide a huge boost for the next initial public offering coming to the market, Milford Asset Management senior analyst William Curtayne says.

That boost would come whether it was state-owned Meridian being partially floated by the Government, or a private company going to the market, he said from Auckland.

Mighty River Power, the first of the Government's state-owned energy assets to be partially sold, debuted at $2.73 a share, up from the $2.50 price investors paid.

It settled around $2.60 to $2.64 on massive volumes, before closing at $2.62. More than 59.8 million shares were sold for a total turnover of $159 million.

Mr Curtayne said it was a good outcome. Investors made some money and the Government had not sold the company too cheaply.

There was some overseas selling during the day, as large funds sold out to take the 7% gain, but also there was strong demand for the shares from domestic institutions and household buyers.

The buying and selling balanced out during the day, he said.

Finance Minister Bill English said Mighty River Power's shares rose as expected.

The Government raised $1.7 billion selling 686 million shares, or 49%, of the company. The money gained will go to the Government's Future Investment Fund.

The 9.2% initial gain compared with a 22% jump on debut for the Fonterra Shareholders Fund on November 30.

Mighty River Power was ranked fifth on the top 10 stocks on its performance yesterday but it will not officially enter the NZX10 until later in the year.

The Government is aiming for a second listing this year and Mr English is expected to announce the next company to be partially sold in his Budget next week.

Meridian, the owner of the Manapouri electricity project, is expected to be the next company sold down. However, negotiations between Meridian and Pacific Aluminium, the operator of the Tiwai Point aluminium smelter, are said to have broken down. Pacific Aluminium wants a reduction in the price it pays for electricity from Manapouri.

Market rumours yesterday suggested the two parties were close to settlement, but that could not be confirmed. Genesis Energy is also earmarked for sale before the election next year and there is a possibility the Government will sell down some of its stake in Air New Zealand.

- dene.mackenzie@odt.co.nz

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