Crunch time for IPOs as Peter Warren readies research

Motor group Peter Warren could hit the market valued at as much as $1.5bn.

This week is shaping up to be crunch time for a number of initial public offering prospects, with the $1 billion-plus Peter Warren Automotive set to be releasing analyst research.

Peter Warren is expected to raise anywhere between $500m and $1.5bn, depending on whether the founding Warren family opts to retain some of the dealership properties.

The owners, which include Quadrant Private Equity, are looking to capitalise on the revival of used car sales after the global pandemic.

Under Quadrant’s control, the company combined in 2017 with James Frizelle’s Automotive Group, which was established in 1985 and is one of the largest motor vehicle dealers in Queensland.

It sells over 15,000 new and used vehicles annually across 11 new brands from six sites in South East Queensland and Northern NSW.

Allegro Funds Management, meanwhile, appears to be persevering with efforts to float clothing and homewares retailer Best & Less, with more site visits for investors scheduled for this week.

Earlier, the aspirations were to list the business with a $400m market value.

However, for a number of the up-coming floats, the big test question is what level of appetite there will be among retail investors.

Next Capital’s flower wholesaler Lynch Group is understood to have secured strong support for its initial public offering from institutional investors, but the deal was repriced from $484m to $440m when the demand from retail investors was weaker than expected.

There are questions also hanging over Quadrant’s other IPO prospect, online auction house Grays Australia.

The company is maintaining that it wants to raise at least $200m, but prospective investors for a cornerstone process have been told that the company’s value would be around $200m.

Also, Kohlberg Kravis Roberts may have to pare back its valuation hopes for the non-bank lender Pepper Money, with fund managers indicating they would be prepared to pay between 8 and 10 times its net profit rather than the 13 times some in the market had earlier been expecting after meeting with its advisers, which include Goldman Sachs, Credit Suisse, Reunion Capital and RBC.

However, KKR has locked in cornerstone support for its other non-bank lender Latitude Financial to list as a business worth $2.6bn with a 6 per cent dividend yield, as revealed by DataRoom last week.

The Ahmed Fahour-run lender that offers personal loans, credit cards, car loans and retail finance will raise $150m at $2.60 per share ahead of an April 20 listing and only plans to secure about $30m from retail investors with four institutional investors offering cornerstone support.

This is in addition to Japan’s Shinsei Bank buying a 10 per cent stake for $300m.

Retail brokers involved are Bell Potter, Ord Minnett and Escala.

In the finance space, Pepper and Latitude will be going head-to-head with the other non-bank lender, Columbus Capital.

Columbus was set to reveal details around its raising size and valuation of its IPO early this week, with its market value expected to be less than $500m.

Another company gaining attention is the $600m Crescent Capital-owned pathology provider Australian Clinical Labs, which has been carrying out early investor education meetings ahead of its planned listing.

Prospective investors have heard that the company has a competitive advantage due to its IT platform and that it has similar aspects to a waste management company, where it grows earnings by picking up additional contracts.

Meanwhile, Fantastic Furniture is delivering an operational update in March in what many are seeing as a further indication that its owner Steinhoff International is thinking of taking it back to the market for a second IPO attempt.