Nine Entertainment will hit the public market on Friday with a value of $1.9 billion, after pricing at the bottom of the indicative price range in the hope of boosting demand in the secondary market.
The commercial free-to-air television, ticketing and digital business will list at $2.05 - the indicative share price range was $2.05 to $2.35 - with the book-build believed to be covered just under three times over.
Sources said the float could have been conducted at $2.10 but the company wanted demand to exceed supply to help support the stock in the secondary market.
"We are delighted by the strength of demand received for our IPO across ... domestic and international investors," Nine chief executive David Gyngell said.
The register will be made up of at least 70 per cent local investors and 30 per cent offshore investors, excluding the retail offering that makes up 15 per cent of the $643 million raising.
It is understood many of the offshore investors that missed out on stock were hedge funds and considered less likely to be long-term holders. This led to the register skewing towards local institutions, who were bidding strongly at the lower end of the price range.
It is believed the majority of Australia's largest fund managers have participated in the equity raising, including Perpetual, AMP Capital and BT Investment Management, while some of Nine's existing owners increased their holdings. The company's major shareholders, hedge funds Apollo Global Management and Oaktree Capital did not buy more stock.
George Soros' Soros Fund Management is understood to have invested $6 million to $8 million.
"It's a clean domestic media and advertising play, which has got a good market position, is well run and those are the ingredients we look for," BTIM head of equity strategy Crispin Murray said.
"If the ad cycle improves they will get top-line growth and if they keep their costs under control you will get healthy growth in underlying profit."
Tyndall Investment Management portfolio manager Michael Maughan said if Nine performed well on the secondary market it was potentially positive for rival Seven West Media.
Nine's final price reflects a multiple of 8.3 times forecast fiscal 2014 earnings before interest, tax, deprecation and amortisation, compared with Seven, which trades at 6.4 times. Seven has a superior TV EBITDA margin to Nine and better cash conversion.
"Given their superior cash conversion, there is no reason Seven can't trade up to Nine's multiple as well," Mr Maughan said.