Advisers working on the float for SG Lottery have locked in cornerstone demand worth more than $3bn, according to sources.
The understanding is that the cornerstone demand for the float is between 14 and 15 times earnings before interest, tax, depreciation and amortisation, as largely expected.
At that pricing, the company will have a yield of between 4 and 4.4 per cent for the 2022 financial year.
The offer will be more than $4bn, say sources, with about two thirds of that allocated before the prospectus lodgement early next week.
Following that, shares will be sold in a broader institutional offer and retail investor sale program.
Advisers to the US-based Scientific Games, which owns SG Lottery, have been finalising meetings to lock in cornerstone support in recent weeks.
An announcement on the pricing of an IPO is due at the weekend.
The company says its annual adjusted earnings before interest, tax, depreciation and amortisation (AEBITDA) is set to reach $US499m this year.
SG Lottery makes most of its money from the US and Europe servicing the infrastructure needed for scratch lotteries.
Jarden, Macquarie Capital, Morgan Stanley, UBS and Goldman Sachs are working on the IPO.
The earlier understanding was that the US-based lottery service provider hoped to secure $3.5bn from cornerstone investors ahead of an IPO worth about $5bn, with the company worth about $8bn excluding debt.
Typically demand from Australian investors for an IPO does not exceed $1bn, so companies wanting to raise more are heavily reliant on overseas funds.
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