The Dairy Equity Ltd float has already generated strong interest from investors, particularly from institutions keen to finally gain exposure to New Zealand's biggest export business.
Neil Craig, executive chairman of ABN Amro Craigs, is jointly arranging and promoting the float with dairy industry fund manager GT & Co.
Yesterday,
he said most of the $100 million shares on offer, including the over-subscriptions, had already been allocated.
"We went to the market and got firm allocations last week and $80 million is fully booked, and already signed up. The last $20 million, under a promise we made to rest of the brokers, we are leaving that out there until they firmly understand it and we'll allocate that by the end of next week."
Craig said "a number of institutions" had taken up shares directly, including one "well-known large New Zealand institution" with a cornerstone stake. Private client brokers had also taken up the shares.
"It'll end up being a really good strong register across institutions and retail," said Craig.
Craig would not say who the cornerstone institutional shareholder was but industry scuttlebutt has the ACC or Fisher Funds Management in the frame.
ASB Securities head of advisory Stephen Wright said his firm had taken "a small allocation" of Dairy Equity shares.
"We will get some demand from retail clients when the publicity kicks in but we're not focused on it."
However, he understood institutional investors had expressed strong interest.
"I guess the upside of it, and this is why everybody really wants a Fonterra float, is we're one of the few countries in the world where 30 per cent of GDP, or whatever the dairying sector is, is not even represented on our market. For instance, short of owning a farm themselves, this is a way of getting exposure."
The head of Macquarie Financial Services Group, John Rowley, said his firm had taken up some of the allocation.
"We've had reasonable client interest. Clearly as a new product there was a bit of 'let's see how it goes'."
However, he noted there was not much of stock available for private clients, "because they've got some fairly sizeable shareholders in it".
