Jarden shares priced at below $10 in latest auction

Jarden’s shares were auctioned off to coincide with bonus payments. Picture: iStock

Jarden – the ambitious Kiwi investment bank that expanded into Australia three years ago – is moving to reassure the market that its investment banking business is on sure footing after shares on Friday took another major valuation hit.

DataRoom understands that there were about 30 shareholders looking to offload stock in the business, with shares priced at $NZ8.50 each in the lunchtime auction.

The auction came as bonus payments were understood to have been made to staff on Friday.

Sources said that a year ago, shares were offered to staff at a value of $NZ25 each as part of their bonus payments.

But based on the share sale in the company that was held in February, the value of the shares in the company had halved, selling at $NZ12.50 each.

Friday’s sale shows a decline in value since February of 32 per cent.

A Jarden spokesman earlier said that less than 0.5 per cent of the company shares tend to trade and on occasion, the company buys back shares.

The latest valuation is likely to be a blow for those looking to cash out, but the sale comes amid a period of tough investment banking conditions, leading to lower fees being paid in the industry across the board.

Auckland-based Jarden Group, which now has 180 staff in Australia, reported a $NZ40m loss for the year to March 31, according to an internal memo sent to staff on Thursday night.

This week, sources around the market were pointing to Jarden’s chairman Robbie Vanderzeil and outgoing managing director Dane Fitzgibbon as sellers of their shares after they stepped down as directors from the business in November last year.

They were among the expensive recruits paid big dollars to launch the Australia arm of the firm, along with Sarah Rennie, Aidan Allen and John Spencer, all one-time star bankers from top stable UBS.

Mr Fitzgibbon is understood to have alerted colleagues and clients to his resignation on Friday, while Mr Vanderzeil remains at the business as chairman, a position he took on after a restructure of the firm, moving from chief executive of the Australia investment bank.

Former Jarden Group chief executive James Lee, who spearheaded Jarden’s expansion into Australia, left the business in recent months and is also expected to be selling shares.

He has also resigned as a director.

Company filings in New Zealand in January show about 250 to -260 shareholders on the extensive shareholder list.

Investment banking bosses Aidan Allen and Sarah Rennie own 0.6 per cent and 0.85 per cent respectively.

Chairman Bill Trotter has 10.17 per cent.

Mr Vanderzeil’s stake fell to 1.08 per cent in January after holding 1.37 per cent in November last year, while James Lee’s holding increased to 4.7 per cent from 4.5 per cent and Dane Fitzgibbon’s holding fell to 0.54 per cent from 0.75 per cent in November.

Outgoing managing director Catherine McCormack had 0.39 per cent at January.

It comes after DataRoom reported this month that Jarden has injected $20m into its Australian subsidiary ahead of bonus time.

The share sale comes as tensions are believed to be building internally at Jarden, with the falling value of its shares creating uncertainty among its staff, about 80 of which are in front office advisory roles in its trans-Tasman business.

This year, there had been deferred cash payments for less than half the staff in the bonus pool, with the company saying that this was part of a focus on retention, adding that junior staff were paid a higher cash component.

But this has been a point of contention among staff members, due to be paid bonuses on Friday after they were offered the opportunity to take shares last year.

The New Zealand financial firm that operates in investment banking and private wealth management has been under close watch among those in the financial industry.

It was understood to have offered top dollar to recruit talented bankers in 2020 as part of a move into the Australian market, with estimates that around $12m was spent securing staff, many of which were former UBS employees.

Its investment bank, which partners with Japanese lender Nomura, has more than 300 staff across Australia and New Zealand, advising on more than $100bn worth of deals, including recently, Brookfield’s buyout of Origin Energy.

Yet while it has had some big wins when it comes to mandates, observers in the market question whether the firm has expanded too quickly, particularly given the tough industry conditions where even the largest and most powerful Wall Street investment banks are being forced to cut staff.

After Jarden said last month it was expanding, rather than cutting staff, more than 10 staff members are now known to be departing the firm.

Deal volume has declined amid a slowing economy after a mergers and acquisitions boom in 2021 during the global pandemic.

Last year, Jarden announced it was separating its investment banking arm from its private wealth business.

Aidan Allen and Sarah Rennie were made co-chief executives of the investment bank across Australia and New Zealand.

According to figures from Refinitv, Australian investment banking activities fell 66 per cent compared to the first quarter period last year, with $US358m of activity generated.

Its internal memo sent out on Thursday said earnings before interest, tax, depreciation and amortisation before bonuses hit $NZ104m for the year to March, while annual revenue was $NZ353m.

Jarden told staff in its internal correspondence that all of its cost out plans had been actioned with a focus on ensuring profitability in challenging market conditions.

It had promoted 2021 recruit Jackson Ross, who joined the firm after ten years with Transurban as its general manager of Partner and Strategic Operations, as Head of Energy and Infrastructure, working with Paul Zhu and Ben Coles.

Former New York-based UBS managing director, Reeny Paraskeva, expanded her remit from head of general industrials to take in responsibility for financial sponsors.

Yan Hui Tan was promoted to Head of Telecommunications and Travel investment banking, in addition to existing coverage responsibilities across technology and industrials.

Millie Horton was promoted to Head of Equity Capital Markets Origination and Nathan Taylor, Head of Debt and Equity Syndicate.

“The promotions come as Jarden has had a strong start to the year advising in relation to Tyro, Nitro, InvoCare, Light & Wonder on its prospective ASX dual listing, Woolworths on the acquisition of Petstock, private capital raises for Mirvac, Vicinity and Logos and defence response for Origin Energy following Brookfield and EIG’s bid for the Company,” Jarden told staff.

“We have achieved scale now in Australia … and a profitable $100 million revenue business in tough markets with a significant expansion of our technology capabilities across the Group.

“While these investments have impacted short term profitability, they have set the Group up for success into the future.”

Jarden added that while balance sheet remained strong with net assets of $NZ147 million, cash at bank of $NZ65 million and liquidity of in excess of $NZ100m, it said the focus of the group going forward would be on realising returns from these investments.