By Eli Greenblat and Jamie Freed
The final price for the much-awaited Myer float has settled at $4.10 per share, with private equity owners TPG and Blum Capital offloading their entire stakes in the department store chain.
An insider told BusinessDay the price had been set at $4.10, which is at the lower end of the indicative price range of $3.90 to $4.90. At $4.10, that price values Myer at roughly $2.35 billion, with the stock due to list on Monday.
TPG and Blum Capital have decided to sell down their entire stakes and leave the register, according to sources who declined to be named.
Investors had been concerned that the private equity firms might keep 10 to 20 per cent of their holding in the floated company, resulting in a stock overhang that might weigh on the share price.
The joint lead managers of the float had set an indicative price range for Myer at between $3.90 and $4.90 per share.
The fund managers, who declined to be named, said there was not as much demand for stock as first expected for the department store chain, especially from offshore institutions.Analysts said the Myer share price was also been pushed lower by the sinking Australian sharemarket this week - including more than 2 per cent today alone - and poor economic data coming out of the United States.
When the owners of Myer and their advisors set the float in motion, the market was in the midst of a bullish run, and combined with the department store's prestige and its use of store ambassador and supermodel Jennifer Hawkins the IPO generated a lot of excitement.
Earlier this week Myer chief executive Bernie Brookes returned from a global investor roadshow for the float, giving presentations to institutional investors, fund managers and pension funds to attract them to the share register.
TPG and Blum bought Myer for $1.4 billion from Coles Group in 2006, and has spent more than $370 million in updating logistics operations and renovating stores.
Myer has 65 stores across Australia, nearly double its upmarket rival David Jones Ltd's 36 stores, and claims 3 million shoppers a week through its doors in a country of about 22 million.
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