IPO drought breaks, with more issues tipped

By ELLEN READ markets writer

Wellington's Wakefield Hospital has broken the Stock Exchange's share float drought for this year and others are expected to follow its lead.

Brokers would not identify the candidates, but Briscoe Group, comprising the Briscoes and Rebel Sports chains, is widely expected to announce a float soon.

Managing director Rod Duke said in May that the company was contemplating an initial public offering, but he refused to comment further yesterday, citing exchange rules that frown on companies discussing their plans before releasing a prospectus.

Forsyth Barr managing director Andrew McDouall said several IPOs were in the pipeline.

"We're going to see a rush between now and Christmas."

The Wakefield offer, organised by Forsyth Barr, is the first IPO on the exchange's main board this year.

The rush of takeover activity before the introduction of beefed-up rules last month has been given as one reason for the paucity of IPOs.

Wakefield yesterday launched its float of 3.3 million shares at $2.50 each. The issue, to raise $7.8 million after fees, will close on September 3, with the company to list on the main board three days later.

Wakefield, a private hospital firm owned mainly by medical specialists and run by general manager Richard Barnes, projects rising revenue, profits and dividends over the next year and says it will use the float proceeds to pay for growth.

The 3.3 million shares will represent 36 per cent of the 9.15 million on issue at the time of listing.

Mr McDouall said there had been significant interest in the issue, with every broking firm wanting an allocation of shares.

There is no public pool. Shares are being allocated only to broking firms, which will then dispense them to clients.

Late yesterday afternoon, Mr McDouall was confident the allocation of shares to brokers would be complete today.

Eight IPOs listed on the main board last year: Beauty Direct, eVentures, Frucor Beverages, GDC Communications, Genesis, National Mail, Software of Excellence and Vending Technologies.

Also in that year were four other new listings, known as listing by summary profile, in which unlisted companies graduate from the secondary board, or listed companies float an existing division.

Although Wakefield is the first IPO listing this year, there have been other listings by summary profile: Richmond, Wellington Drive Technologies, Fletcher Building, Rubicon, Fletcher Forests, Kirkcaldie & Stains and Blis Technologies.

But more companies have left the main board this year, for reasons including takeover and receivership: Fletcher Energy, Fletcher Challenge, Grow Corp, Kiwi Development Trust, Max Resources, Manor Inn, Nufarm, PDL, Roller International, RadioWorks and South Eastern Utilities (formerly Amuri Corp).

The Australian Stock Exchange has bemoaned the drop in IPOs in the 2000-01 year to 156 raising only $A5 billion ($6.04 billion), down from 183 raising $A18.8 billion in 1999-2000, according to KPMG figures.

The accounting consultancy does not keep similar records for New Zealand.