Graeme Hart's Rank Group only this week confirmed plans to float Carter Holt Harvey but the cut and thrust that often accompanies large initial public offerings has already kicked off.
One market source said this week that his firm would be dubious of any numbers included in Carter Holt's offerdocuments "to the point where it makes it almost uninvestable for us". He added that his would be "a common view" among local fund managers.
The poor post-listing performance of Australasian food giant Goodman Fielder, which Rank floated in 2005, is lurking in the background.
Then there's Carter Holt's history. The building supplies firm was a serial underperformer during its final years on the sharemarket before Rank took it private in 2006. Questions are also being raised about Carter Holt's growth prospects.
Another source said one Australian fund manager he had spoken to last month had branded the deal "uninvestable", while another had labelled it "avoid".
Par for the course
Such commentary is, of course, all part of the game.
Fund managers aren't known for talking up the price of deals, or being overly bullish about prospective issuers, in the lead-up to IPOs. And the key details of the offer, as well as the quality of the firm's yet-to-be announced board, remain to be seen.
But Carter Holt's bankers - including First NZ Capital, Forsyth Barr and Deutsche Craigs - will be keen to avoid the offer meeting the same fate as equipment rental firm Hirepool's attempted float last year. That deal was aborted as a result of unrelenting "push back" on pricing by wary institutional investors.
It's also reasonable to expect that the broking arms of the investment banks flogging Carter Holt will snap up shares for their retail clients, who may well be wooed by tantalising dividends.
The one IPO that has taken place this year, transport and logistics firm Fliway Group, experienced a fair amount of pricing pressure. It ended up being priced at $1.20, the bottom of the indicative range presented to brokers and fund managers.
Still, market appetite remains for quality offers, and Carter Holt isn't facing any competition from other IPOs on this side of the Tasman.
It's also reasonable to expect that the broking arms of the investment banks flogging Carter Holt will snap up shares for their retail clients, who may well be wooed by tantalising dividends. Brokers are expected to issue pre-IPO research on Carter Holt early next month. A prospectus is anticipated in the middle of June, with the float - tipped to value the firm at up to $1 billion - pencilled in for early July. Rank is expected to retain a 30 per cent stake.
Pillow pain
Medical device maker Resmed's pain appears to have been rubbing off on its New Zealand competitor, Fisher & Paykel Healthcare.
Both firms are major manufacturers of technology used for the treatment of obstructive sleep apnoea.
Resmed, which was founded in Australia but is headquartered in San Diego, had hoped that a major clinical trial would show its sleep therapy products protected heart attack victims. But in a shock announcement on Wednesday night, the company said the research indicated the technology did the exact opposite and put their lives at further risk.
Resmed shares had fallen more than 17 per cent on the ASX by 1pm yesterday, before eventually closing down 18.42 per cent at A$6.73.
F&P Healthcare stock was down 2.8 per cent in early afternoon trading and finished the day down 1.89 per cent at $6.22.
Harbour Asset Management's Shane Solly said the fall did not suggest F&P Healthcare investors had been hoping for a positive outcome from Resmed's research.
"FPH is not active in this area and is not planning on getting involved in it," he said. "But there has been some knock-on sentiment effect."
Nosh sits at the upmarket end of the grocery market, but Veritas Investments got a bargain basement deal for its acquisition of the struggling retail chain.
The investment firm paid only $1.3 million, roughly $500,000 less than the $1.8 million price initially agreed, according to its half-year report. The final price was almost $600,000 below Nosh's total net asset value of $1.9 million.
Through the sale and purchase agreement, Veritas retained $500,000 of the total consideration to cover any shortfall in the agreed value of Nosh's net assets.
Veritas shares closed up 1c yesterday at 82c.
Go global
US investment management giant T. Rowe Price was in town this week talking up the benefits of global investment.
The Baltimore firm has partnered with local player Harbour Asset Management to bring a wholesale global equity portfolio investment entity (PIE) fund to the New Zealand market.
David Frazer, fund manager for T.Rowe Price. Photo / Jason Oxenham
Through the tie-up, Harbour's clients can invest in T. Rowe's Global Equity Fund - a portfolio of roughly 130 stocks from 31 countries - through a New Zealand PIE fund.
It's now available only to wholesale clients, but Harbour's Kendal Law said the firm was gearing up to make it available to retail investors.
T. Rowe's Melbourne-based head of relationship management for Australasia, David Frazer (pictured), said NZ investors were keener than their North American counterparts to take a global approach to investing.
The fund delivered a 28.2 per cent return, after fees, in the 12 months to February 28.
