Raphael Geminder-chaired packaging empire Pact Group is struggling to find investor support on its debut, shedding more than 8% in the opening minutes of high-volume trade. It came shortly after fellow newcomer GDI Property Group shed more than 10% on debut.
Pact dropped 8.2 per cent at 1220 AEDT, five minutes after listing, against a broader benchmark index rise of 0.36%. At the time 4.96 million shares in the packaging group had changed hands.
Pact’s poor showing follows the shelving last month of former float hopeful BIS Industries, with its private-equity owners blaming unfavourable sentiment towards the mining services sector.
Pact priced at $3.80 per share after Credit Suisse and joint lead manager Macquarie raised $649 million in a float last month, putting its market capitalisation at $1.12 billion. About 57% of Pact’s issued equity – or 171 million shares - was sold.
Pact has 294.1 million shares, including 117 million owned by Melbourne-based Geminder. The Melbourne billionaire’s joint venture partner in Asia, Gary Wolman, received 10 million shares - the roughly 3 per cent not retained by Geminder or offered in the IPO - as part of Pact acquiring one of his businesses in the region.
The pricing represented 8.5 times forecast earnings before interest, tax depreciation and amortisation for this year, of $202 million. Pact came in at 13.4 times based on price-to-earnings and have an enterprise value of $1.721 billion.