National Australia Bank may have been forced to price the float of its US subsidiary at a discount to its original plans, but the stock has at least held up well on its first day of trade despite encountering considerable market turbulence.
Elsewhere, two major banks join NAB in weighing the future of their life insurance divisions, the IPO market receives a Silicon Valley boost, PanAust finally has another suitor knocking on its door and the Lowy family boosts its position in Westfield Corporation.
National Australia Bank’s listing of US subsidiary Great Western Bank was ill-timed, taking place within the most volatile market in three years. However, the stock held up well in its first day of trade overnight, closing in line with its $US18-a-share listing price despite Wall Street stocks losing as much as 2.5 per cent at one stage during volatile trade. The IPO of 27.6 per cent of GWB raised just over $300 million for NAB, with the firm keen to fully exit its position in 2015.
The float comes amid a broader divestment push that could see NAB’s local life insurance division put up for auction. According to The Australian Financial Review, a sales process is not yet underway, but it hasn’t stopped investment banks from sounding out interest from the likes of Dai-Ichi Life, Nippon and MetLife. NAB isn’t the only firm mulling an exit from life insurance, however, with Commonwealth Bank, Suncorp, Hollard, Zurich, AIA Group and MetLife all tipped to either expand or exit. It all points to 2015 being a year of consolidation for the sector.
Meanwhile, the bizarre sales process at PanAust continues to potter along without any official updates, although the AFR is now reporting longtime suitor Guangdong Rising Asset Management has a firm rival in the form of UK-listed Antofagasta. It is unclear if any other bids have been forthcoming, but more info should be forthcoming in a fortnight when the copper group releases its quarterly results.
In the IPO market, 1-Page Ltd’s first day of life on the ASX was a positive one, with the tech firm’s stock rising 70 per cent, to close with a market capitalisation of $40m. While the company is a small fish in a big pond, it’s notable for being the first Silicon Valley-based firm to list in Australia.
Hoping for a similar reception will be Citadel Group, which is set to run a bookbuild next week ahead of a listing in mid-November. The owners of the education and technology solutions firm will offload half of the company for about $50m.
In property, the Lowy family has upped its stake in Westfield Corporation to 9.5 per cent through a $177m purchase of 1.14 per cent of the stock on issue. The development has analysts tipping the Lowys are likely to cut their 3.78 per cent position in Westfield spinoff Scentre Group.
Elsewhere, local firms are now seen as the most likely suitors for Boral’s roof tiles division, with advisor Macquarie Capital scouting interest from Brickworks, among others. A transaction, likely worth tens of millions of dollars, may also draw interest from Fletcher Building and Adelaide Brighton.
Finally, CBA has secured a 5.19 per cent stake in NZ-based ERoad through a $9m share purchase, while Patrick Grove’s Catcha Group has sold 5 per cent of ASX-listed iProperty for a return of about $27m.