Inghams reprices float

Inghams chief executive Mick McMahon. Pic: Hollie Adams

Inghams has repriced its initial public offering to 12 times forecast annual earnings, taking its market value to just below $1.2 billion.

The poultry producer has support for a float at 13.5 times its annual earnings but the deal was repriced at $3.15 per share to ensure robust trade in the after market, sources said.

The bookbuild for the TPG Capital-owned business is scheduled for today.

TPG will maintain a 60 per cent holding in the company, taking the raising to $596.4 million, with the company’s enterprise value to be $1.6bn.

Once listed, TPG will hold 47 per cent of the business.

Fund managers had been indicating that Inghams would be repriced earlier this week, as first reported in DataRoom.

They have taken exception to what they believe are limited growth prospects for the company and are becoming increasingly sceptical of private equity divestments following the collapse of retailer Dick Smith shortly after Anchorage Capital yielded large profits from selling the business via an IPO.

Previously, the group had priced the deal at between $3.57 and $4.14 per share, equating to a market value of between $1.3bn and $1.5bn when it listed this month, or between 13.5 and 15.5 times its forecast annual earnings.

TPG Capital was to raise between $767 million and $1.12 billion, selling between 50 and 70 per cent of its holding.

According to forecasts, the operating business will generate a 13.5 per cent lift in its earnings before interest, tax, depreciation and amortisation to $190.1m for the 2017 financial year.

Annual net profit is expected to grow by 18.9 per cent from fiscal 2016 to $98.8m.