Summerset listing to be limited to 30pc

Summerset Group - which devlops and operates retirement villages - is launching an initial public offer. Photo / supplied

Australia's Quadrant Private Equity plans to list retirement village company Summerset on the NZX in November but volatile market conditions may have played a part in the investment company deciding to offer just 30 per cent of its majority stake for sale.

Summerset said yesterday that it had registered a combined investment statement and prospectus for the offer, which is aimed at raising $122.5 million to $136 million at an indicative price range of $1.40 to $1.60 a share.

Once listed, Summerset, with an expected market capitalisation of $301 million to $336 million, will become a top 50 stock in the same league as DNZ Property and Ebos Group.

Talk of Quadrant, which owns 97 per cent of Summerset, offloading up to half its stake has been doing the rounds for some months, during which time the company has been raising its profile through television advertising and through interviews with top management in the business media.

Quadrant managing director Chris Hadley was not available for comment on the size of the offer, but one financial market source said the amount going on sale had "undoubtedly" been affected by the turmoil on world financial markets.

"The interesting point is how little is actually being raised and how much of that is being retained," he said. "Obviously Quadrant has adjusted the issuance to reflect market conditions," he said.

"That is appropriate and you would expect that from anybody raising capital at this point," he said.

The source said he expected Australian media company Fairfax, which has said it plans to float off 30 to 35 per cent of online trading platform Trade Me, to also scale back its offer if uncertain market conditions continue to dog the markets.

Summerset was once owned by AMP Capital Investors, which sold the company in 2007 after an abortive attempt to float the company, said the final price of the shares will be announced on October 7.

A retail offer for the shares will open on October 10 but there will be no public pool.

In addition to selling down its stake, Summerset will raise $50 million of new capital to accelerate growth.

Summerset's recently appointed chairman, Rob Campbell, said market feedback indicated keen interest in the offer.

"Summerset is a quality business with very favourable underlying demand drivers and, as a result, good growth prospects," he said.

The company has been compared to listed retirement village owner, operator and developer Ryman Healthcare, although the two occupy different segments of the market.

The number of people aged 75 plus is expected to nearly double in the next 20 years.

The company has forecast pro forma net operating cashflows of $51.9 million and total investment properties of $632.6 million for the financial year ending 31 December 2012. Summerset, the country's third largest retirement village operator, expects to list on November 1.