Shares in online trading platform Trade Me have been priced at the top end of a $2.30 to $2.70 indicative range, reflecting intense retail interest in the stock, financial market sources said.
The so-called "book build'' auction-style process for the Fairfax Media-owned company closed today with the price well clear of the bottom of the range.
Trade Me is expected to register its prospectus on Thursday. The share offer will close on December 7 and the company is expected to list on the NZX on December 13.
Financial market sources said there had been intense interest in the issue, particularly from individual investors. One source said he feared the issue may have been "over-cooked''.
"The trouble is that they have been serving free drinks for two or three weeks and everyone is a bit intoxicated,'' he said. "It will be interesting to see what happens when the headache subsides,'' he said.
At $2.70 a share, the pressure will go on Trade Me to perform.
Going on its 2012 forecast earnings, the share price would put Trade Me on a multiple of around 11.8 times earnings before interest, tax, depreciation and amortisation, and a price earnings ratio of 16.5 times.
Trade Me had aligned its valuation with some similar companies, such as Australia's Seek, which has a price/earnings ratio of 15.1 times.
Between 118.8 million and 134.6 million shares will go on offer, after which Fairfax Media will end up with 66 to 70 per cent of the company.
The issue looks likely to raise more than $300 million for Fairfax, which it intends to use to pay off debt.
Upon listing, Trade Me will have a market capitalisation of around $1 billion, putting it in the same league as listed discount retail chain, The Warehouse.
Trade Me, which has 2.8 million members, was bought by Fairfax for $750 million in 2006.
