Metroglass bookbuild sets price at $1.70 - near bottom of range

An auction-style book build process for Metro Performance Glass is set to start today. Photo / Dean Purcell

Metro Performance Glass, New Zealand's largest glass maker, will sell shares at $1.70 apiece in an initial public offering, near the bottom of the range, say institutional investors who had previously baulked at Hirepool's offer.

In a bookbuild overnight Metroglass price came in at the lower end of the $1.65 to $1.90 range. The pricing comes after the Hirepool float fell over because the promoters' suggestion of price was at odds with institutions. Two fund managers have confirmed the price to BusinessDesk.

"I think the Hirepool offer was a turning point because it showed it wasn't that there was a boycott of Hirepool, it was just that we all went for much lower prices," said Brian Gaynor, executive director at Milford Asset Management, which participated in the Metroglass bookbuild. "I think we're just going to play a bit more tough on the vendors in these situations and not be prepared to pay whatever they think they want to get for it."

Metroglass was aiming to sell between $237 million and $273 million, offering shares at between 12.5 to 14.5 times earnings. A draft prospectus has been in the hands of fund managers since Monday, while retail investors may have to wait until next week for details, when the company lodges its prospectus with the Companies Office.

The Metroglass vendor is Australian private equity company Crescent Capital, which has owned the Auckland-based business for six years, but it is not yet known if they are partially or fully selling down. Anchorage Capital and other major shareholders are also selling down in the float.