Latitude Financial’s moves towards a listing are expected to be closely watched in the coming days after the non-bank lender allocated 25 per cent of the shares to retail investors, amounting to about $330m worth of stock.
The allocations, which were revealed by DataRoom online on Wednesday, came after it was expected that about a third of the float would be sold down to retail investors at a time they are said to be keen to invest in high yielding opportunities amid a low interest rate environment.
Investors were told that demand from retail investors was strong and they would be allocated $330m worth of shares as a firm allocation through all points in the price range of between $2 per share and $2.25.
Latitude hopes to raise between $1.24bn and $1.4bn, with the company to have a market value of between $3.556bn and $4bn.
So far, expectations are that Latitude will likely list with a market value of about $3.6bn, and the group will be keen to defy sceptics who claim that the lender may only just get across the line.
Others close to the deal are confident a listing will proceed, market conditions permitting, with enough demand to see it list with a value of $4bn.
The message to the market on Wednesday was that the 25 per cent retail investor allocation was typically in line with other retail broker IPO allocations.
The international leg of Latitude’s management roadshow for its IPO is ramping up this week ahead of the bookbuild next week.
The prospectus has the company valued at between 7.8 times and 8.8 times Latitude’s pro forma adjusted earnings before interest, tax, depreciation and amortisation.
Run by Ahmed Fahour, Latitude offers consumer finance through services such as personal loans, credit cards, car loans, personal insurance and interest-free retail finance. The former GE Australian and New Zealand consumer lending business and is owned by Kohlberg Kravis Roberts, Varde Partners and Deutsche Bank.
The pricing is to be finalised during the bookbuild on October 15 and 16. Working as joint lead managers on the IPO are Goldman Sachs, Macquarie Capital and UBS.
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