Meridian IPO raises NZ$1.88bn

The New Zealand government sold shares in the Meridian Energy IPO at the bottom of the indicative pricing range.

Meridian Energy Ltd’s initial public offering will raise NZ$1.88 billion, the biggest IPO in Australia and New Zealand this year, after strong individual investor demand for the stock at the lower end of the NZ$1.50 to NZ$1.80 a share price range.

The IPO attracted more than 62,000 investors, 86.5 per cent of them New Zealanders, who will pay $1.50 for the shares over two instalments 18 months apart. Meridian will list on the New Zealand Stock Exchange next Tuesday with a market value of NZ$3.84 billion.

“Meridian has attracted a different mix of investors than we saw with Mighty River Power earlier this year,” NZ Finance Minister Bill English said in a statement. “While demand was strong and broad based, overall we saw fewer retail investors bidding for larger parcels of shares.”

After the IPO the NZ government will still have a 51 per cent stake in Meridian. It will use the proceeds of the share sale to invest in the country’s infrastructure. The government has raised NZ$3.58 billion through the sale of Might River Power and Meridian this year.

The sale of the 49 per cent Meridian stake is the second in a string of planned asset sales by the New Zealand government, which wants to raise about NZ$5 billion to repay debt and return to a budget surplus.

Deutsche Bank AG, Craigs Investment Partners Ltd, Goldman Sachs Group Inc and Macquarie Group Ltd were lead managers of the Meridian IPO.