DataRoom AM: Float fizzle

Asaleo Care's bookbuild closes early despite concerns investors are growing wary of the IPO market, while Woolworths’ pubs portfolio proves a hot ticket.

The IPO market is at a crucial juncture, with a number of high profile offerings ready to hit markets just as investors show signs of growing a little weary, and wary, of new offerings.

Elsewhere, Woolworths receives plenty of interest in its pubs portfolio, the Victorian government whittles down the contenders for the East West Link and Echo Entertainment takes the fight to James Packer for a second casino in Brisbane.

Two straight opening day disappointments in the IPO market (Mantra Group and PAS Group) have investors a little cautious of new floats, but it hasn’t stopped them forcing the bookbuild of the second largest float of the year to close early. According to The Australian Financial ReviewAsaleo Care -- formerly SCA Hygiene -- has priced its shares close to the middle of the indicative $1.55-$1.80 a share range after strong demand was forthcoming from fund managers.

Lead advisors Bank of America Merrill LynchCiti and Macquarie Capital closed the two-day bookbuild a day early, with about $650 million raised.

It’s a promising sign for the Sorbent maker ahead of its Friday debut, which is more than we can say for New Zealand’s Hirepool. The equipment hire group, which had hoped to hit ASX and NZX boards on July 11, has abandoned its $250m float after meeting weak demand at the price it was chasing, the AFR said.

Also in the IPO market, LNG Ltd is mulling a listing in the US, while Hoyts is reportedly tilting towards a $700m IPO in November though there has been trade interest from China in the Pacific Equity Partners-owned cinema operator.

Meanwhile, Woolworths is a fortnight away from a decision on the way forward for a divestment of $650m worth of pubs and liquor stores, according to the AFR. The retail giant has received six bids for the portfolio, including offers from ALE Property Group and Charter Hall Group, but may yet choose an ASX listing over a trade sale.

In infrastructure, the Victorian government has narrowed its shortlist of potential builders of the first stage of the East West Link to two. A partnership that includes Lend LeaseAcciona and Bouygues Construction will fight a consortium that contains Samsung C&TTransfield Services and Macquarie Capital, among others.

A joint venture that included Leighton’s John Holland was left out of the mix for the $8 billion first stage, with the government to announce the successful tenderer in October.

Consortiums are all the rage in the race for the new Brisbane casino licence as well, with Echo Entertainment teaming with Chow Tai Fook Enterprises and Far East Consortium to submit a joint proposal for the Queen’s Wharf Brisbane project.

It appears a smart move by Echo in its endeavour to beat out James Packer’s Crown Resorts and China’s Greenland Holdings.

In energy, the chase for Ambassador Oil & Gas has turned fiery and a little confusing. Both suitors, Drillsearch Energy and Magnum Hunter Resources, have now been barred from taking acceptances as the Takeovers Panel assesses complaints from each suitor about the others conduct. In the meantime, Ambassador’s board has withdrawn its support for Drillsearch, with investors told to wait for further guidance.

Finally, there is persistent -- and overly optimistic -- speculation about a fresh bid for GrainCorp from Archer Daniels Midland, driving the possible target’s share price higher in recent days.

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