Inghams backers shake off doubts over raising for $1.3 billion-plus IPO

Chicken is the largest meat protein consumed by Australians. Picture: Supplied.

Backers of the $1.3 billion-plus poultry producer Inghams Enterprises float continued to shake off suggestions that the deal may struggle to gain support on Monday, as they maintained that the investment banks behind the initial public offering were tipped to scale back orders from retail investors.

It comes as bids on the IPO by retail brokers are due tomorrow.

Strong demand for the deal is coming from Asia and other international markets, according to reports from those supporting the deal.

Suggestions entered the market at the weekend that the float may struggle to gain support after Healthscope, which TPG Capital floated in 2014, issued a profit warning, sending its shares up to 30 per cent lower.

But others maintain the float is fairly priced, and some wealthy private investors are throwing their support behind the deal.

This is based on the escalating costs of beef, the strong management team and the market dominance of Inghams as the largest poultry producer in Australia.

Chicken is the largest meat protein consumed by Australians — now 35 per cent in total after growing at 4 per cent to 5 per cent annually between 1990 and 2015.

Appeasing retail investors will also be its yield of between 4.4 per cent and 5 per cent amid a low interest rate environment.

It is believed that should the deal proceed, the price for the business will likely see Inghams shares sell at the mid to low end of the pricing range, which has the market value between $1.3bn and $1.5bn.

On the basis it prices at the mid to low end of its range, shares will sell between $3.57 and $4.

This would mean its market value would fall somewhere between $1.3bn and $1.4bn, as TPG and management likely raise close to $1bn.

Inghams CEO Mick McMahon. Picture: Kelly Barnes/The Australian.