The Treasury has handed out the coveted joint lead manager roles for the forthcoming Meridian Energy float, with two of the managers for the recent Mighty River Power float getting the nod again.
The two reappointed companies are Goldman Sachs New Zealand and Macquarie Capital New Zealand. Missing out this time though are First NZ Capital Securities in partnership with Credit Suisse (Australia). In their place as the third lead managers are Deutsche Bank AG New Zealand in partnership with Craigs Investment Partners.
Deutsche was involved in the MRP float as crown advisor, while Craigs were co-managers of the retail share offer in New Zealand.
And while there has been no word yet on the timing for a proposed float of the last of the state energy companies up for sale Genesis, Treasury has appointed UBS as lead manager, with further joint lead manager appointments to be made later.
The Government has signalled that Meridian will be sold later this year. Based on recent valuations, sale of 49% of it could raise as much as NZ$3.2 billion toward the NZ$5-7 billion the Government has targeted, which it wants to invest in new state assets.
However, the shares in MRP, which sold for NZ$2.50 each as part of a NZ$1.7 billion float earlier this month, are currently selling below their issue price and the Prime Minister John Key indicated yesterday that the sale of Meridian might be done in two blocks to avoid giving the sharemarket indigestion. MRP shares were selling for NZ$2.39 on the NZX this afternoon, up 3c yesterday's closing price.
The prestige of the joint lead manager appointments is indicated by the fact that the joint lead managers of the MRP float,, each had base fees of NZ$666,666, with a potential to earn another NZ$1,333,334 by way of performance fees based on the achievement of certain agreed performance criteria.
In addition, the lead managers jointly were paid a commission of 0.4% of the aggregate proceeds of all shares sold to Institutional Investors in New Zealand and a commission of 0.8% of the aggregate proceeds of all shares sold to institutional investors outside New Zealand. All these fees were included in projected issue expenses for the MRP offer of NZ$48.7 million.
The joint lead managers for the Meridian and Genesis offers were selected from the panel of six companies that were appointed through a competitive tender process last January. The one party out of that list of six to not at this stage get a joint lead manager job is the partnership between Forsyth Barr and Merrill Lynch, though Forsyth Barr did get the retail offer co-manager job along with Craigs for the MRP float.
The Treasury has also appointed Bell Gully as legal advisor for the Meridian IPO. Bell Gully advised Treasury on the Mighty River Power IPO.
The Treasury said it had invited members of the six-strong joint lead manager panel to bid for appointment to one or both of the Meridian and Genesis offers.
"The bids were of a high quality, and the Treasury’s decision was based on the best combination of firms to assist it to achieve the Government’s objectives for the IPOs," a statement from Treasury said.