Breakfast Deals: Metering Meridian

The New Zealand government has a nifty way of encouraging first-time investors to participate in the Meridian Energy float and 360 Capital Property Group secures a backdoor listing.

The New Zealand government has come up with a nifty way of encouraging first-time retail investors to participate in the Meridian Energy float. Meanwhile, 360 Capital Property Group has reportedly secured a backdoor listing, Ansell is continuing to hunt for acquisitions and Arrium shows its former suitor a thing or two.

Meridian Energy

New Zealand Prime Minister John Key has announced a rather clever initiative to support retail Kiwis buying into the Meridian Energy float.

When the Meridian IPO comes by in November, first-time investors will be able to purchase shares with a 60 per cent payment up front with the obligation of covering the remainder in the next 18 months.

However, in the meantime, they get to keep the dividends. This is first time this columnist has heard of such a devise being used.

While it might seem an odd arrangement to have the shareholder paying off the remainder owed on the shares while collecting the dividend in the same breath, the scheme amounts to an interest-free loan from the government to give New Zealanders a taste of what it’s like to invest in the share market.

In concept, this column likes the idea. However, it increases the political risk of the debut.

If the float goes badly, you can imagine the headlines when first-time investors are caught with a liability on a parcel of shares worth less than they paid for it.

It means the Key government really has to make sure Meridian stays above its issue price on its debut.

And while we’re talking floats, The Australian Financial Review understands that Pacific Equity Partners is considering a float of its credit reporting business Veda.

The business, which might even be floated by the end of the calendar year, could be valued at more than $1 billion.

360 Capital Property Group, Trafalgar Corporate

360 Capital Property Group has reportedly found its way to the ASX via the backdoor of Trafalgar Corporate Group.

Trafalgar went into a trading halt yesterday pending the completion of a capital raising. Its shares were halted at 46.5 cents apiece, valuing the company at $39.7 million.

The Australian reports that Trafalgar has been “quietly” raising $70.8 million over the last week at 59 cents a share to purchase 360 Capital.

The newspaper says the property fund manager’s founder Tony Pitt will emerge with a 20.7 per cent stake.

Ansell

Ansell announced its commendable results yesterday in the face of global uncertainty. Let’s see if we can get through this story without a juvenile pun about the glove and condom maker.

Managing director Magnus Nicolin said yesterday that Ansell will continue pursuing acquisitions after booking a 5.2 per cent increase in net profit to $136.8 million in the last financial year.

"Acquisitions continue to be a priority for the business," Nicolin said yesterday. “The M&A route is very attractive, providing you are selective...and then move quickly to integrate, which is what we intend to do.”

Nicolin netted four acquisitions last year including Hercules from Brazil and Comasec in Britain. Indeed this is the last set of results that will be reported in Australian dollars as the company becomes an increasingly international player.

There was little indication about where the next stage of the hunt will be focussed, but the sharemarket doesn’t seem to mind. Ansell stock finished the session 3.5 per cent higher at $19.10, which is not far off the company’s all-time record.

Okay, that went alright. But rest assured the next time Ansell pops up in this column it’ll be nothing but shameless puns.

Wrapping Up

Arrium shares were buoyed to the tune of 16.8 per cent during yesterday’s session the back of some better than expected results and a comforting outlook for China.

The steelmaker’s shares ended the session at $1.15, well ahead of the 88 cents Steelmakers Australia put on the table back in October, which the board rejected.

Consider the board thoroughly vindicated.

Meanwhile, The Australian Financial Review reports that Kathmandu founder Jan Cameron has reportedly proposed to pay $5.5 million, or 6.46 cents in the dollar, to the creditors of discount variety chain retail Adventures in order to retake control of the collapsed group.

And finally, online health insurance start-up Health.com.au is reportedly eyeing a sharemarket float in the order of $100 million.

The Australian carries the story this morning, which includes details of how former NSW opposition leader, John Brogden, holds a small stake in the company.