The final price the Government achieves for Mighty River Power shares is unlikely to be at the bottom of the $2.35 to $2.80 per share range, a source close to the transaction said this morning.
However, the source would not be drawn on speculation in the Australian Financial Review (AFR) that $2.60 a share was a likely final price.
"The book build is progressing well and the book is well covered," the source said. "I can't comment on the AFR's price, but it is certainly off the bottom of the range," he told APNZ.
The Government is expected to release the final pricing tonight. The financial markets also expect to get an idea, in broad terms, about share allocations tonight.
Mighty River's joint lead managers are First NZ Capital/Credit Suisse, Goldman Sachs and Macquarie Securities.
The so called book-build process, when institutions put their bids in for Mighty River Stock, is under way and will close this afternoon. The Government will decide on the final price and announce it this evening.
The international segment of the offer is expected to be worth $400-$500 million.
The state will retain a 51 per cent stake in Mighty River and Prime Minister John Key has said he is confident the company will be 85 to 90 per cent owned by New Zealand entities.
Mighty River is then due to list on the New Zealand and Australian stock exchanges this Friday.
The controversial Labour-Greens electricity market policy put a dent in the market's price expectations for Mighty River and indications last week were that the likely price had shifted to the lower half of the indicative range.
Before the Labour-Green announcement, expectations were for the price to be at the upper half of the range.
The Government is keen a successful float of Mighty River - whose assets are heavily weighted towards "green" generation assets of hydro and geothermal - because it wants the issue to pave the way for the partial privatisation of its biggest generator, Meridian Energy, and Genesis
At the indicative price range of $2.35 to $2.80 a share, the Mighty River stake will be worth between $1.61 billion and $1.92 billion.