NZ IPO issuance fades as focus turns to Australia

Investment banks not involved in this year's New Zealand privatisations hope a flurry of Australian IPOs will boost their league table positions.

By Brett Cole

New Zealand’s initial public offering has been the hottest in the antipodes in the last 12 months with $4.3 billion of share sales, almost double the amount of IPOs across the Tasman, according to Bloomberg data.

But the critical component NZ has played in the IPO league tables Down Under in the last year may now fade a little.

After the $1.56 billion IPO of Meridian Energy Ltd and the $1.4 billion IPO of Mighty River Power Ltd, the sales of Genesis Energy Ltd and Air New Zealand are next. Their share sales are not expected to be as large as Meridian and Mighty River.  

“We expect the Genesis IPO to take place in the first half of 2014,” NZ Finance Minister English told DataRoom, giving no further details. English declined comment on when or how the government will sell its 73 per cent stake in Air NZ, currently worth $1.08 billion.

Macquarie Group Ltd and Goldman Sachs Group Inc owe their first and second places respectively on the Australia and NZ IPO league table to their joint lead management roles in the Meridian and Mighty River IPOs, according to Bloomberg.

Two NZ firms, First NZ Capital Ltd and Forsyth Barr, also benefitted in the IPO league table, like Macquaire and Goldman Sachs, from helping to manage the NZ government's privatisations.

First NZ Capital is currently ranked fourth and Forsyth Barr is ranked seventh in Bloomberg’s Australia and NZ IPO league table rankings. 

First NZ Capital and its joint venture investment banking partner Credit Suisse Group AG have won joint lead manager roles on the Genesis IPO with UBS AG. All three will be anxious to get similar roles in the Air NZ sale.

But UBS, First NZ Capital and Credit Suisse must now deal with IPO fatigue in New Zealand and hope it will dissipate next year.

Still, New Zealand is not at the forefront of the minds of UBS’ equity capital markets team at the moment. The firm is basking in its role as sole global coordinator of the Nine Entertainment Co’s IPO that could raise as much as $697.3 million by December 5.

The Swiss investment bank, together with Citigroup Inc, is also managing the $341 million IPO of Veda, the credit bureau owned by Pacific Equity Partners, another December ASX listing.

These two IPOs may help bolster UBS’ position in the Australia and New Zealand IPO 2013 league table ranking.

The Swiss investment bank is currently ranked nine, according to Bloomberg, a lowly position for what has previously been seen as the pre-eminent equity franchise in Australia and New Zealand.