Redcape bookbuild faces strong demand
Shares in Redcape's new $500 million-plus Hotel Property Fund will probably trade at the upper end of its $2 to $2.15 range when it lists on the Australian Securities Exchange next month, according to market sources.
The bookbuild had been accelerated because of strong demand, sources said. It was launched last night after Asian markets ceased trading, and will close today, a day ahead of schedule. Retail investors were likely to account for about 20 to 25 per cent of the register.
The pub owner received a strong response from retail investors and domestic institutions on its roadshow, which started last week, prompting the Asian leg to be cut short.
Joint managers JPMorgan and Goldman Sachs are raising about $286m of equity for the landlord to list on the stock exchange on December 10. It will own 41 pubs leased to Coles and seven bottleshops.
Sources said the company would secure 95 per cent of its income from Coles on long leases and would have debt levels of 40 to 50 per cent.
Others drawcards are contracted rental increases of about 4 per cent, with some suggesting the investment is akin to a bond, and the strength of the company's board, led by former Challenger Financial chief executive Michael Tilley.
The trust has an anticipated yield range of 7.4 to 7.9 per cent for the 2015 financial year.
Sources have said that the business will differ from Riversdale -- a pub company that was previously tipped to list on the stock exchange.
However, Riversdale operated as well as owned pubs, according to sources, who argued that a company that was simply a pub landlord rather than an operator involved less risk.
The Australian revealed earlier this month that plans for a $250m-plus float of Riversdale -- backed by high-profile investors including Mark Carnegie -- could be shelved, as the group turns its attention to a potential recapitalisation by a financial services group.
The Riversdale group, which also has former Qantas boss Geoff Dixon and advertising veteran John Singleton as investors, has engaged with investment bank Citigroup about plans to list a company on the Australian Securities Exchange. It would be valued at $250m to $500m, a source says. It will include pubs, marinas and possibly other assets such as hotels, car parks and self-storage facilities.
Source: The Australian 19 November 2013
