Ahmed Fahour’s Latitude Financial IPO goes down to the wire

Latitude Financial CEO Ahmed Fahour. Picture: Kym Smith

The heavily discounted $3.1 billion float of Latitude Financial - led by celebrity CEO Ahmed Fahour - was hanging in the balance hours as its bookbuild closed at 5pm.

Margin Call understands that the joint lead managers to the offer - investment bankers at UBS, Goldman Sachs and Macquarie Capital - were working the phones overtime to get away the float away - which was first pulled around this time last year - at the repriced offer price of $1.78-a-share.

“This is touch and go. It’s up to the market now,” a source close to the deal said.

It’s the stuff of nightmares for investment bankers, and celebrity CEOs.

No float means no multimillion-dollar fees for the advisers.

And it would be the end of Fahour’s almost $45m Latitude windfall.

Read more | Latitude claims IPO demand strong

Indeed, a shock collapse of the float would be the biggest failure in Fahour’s glittering corporate life since Michael Chaney picked Cameron Clyne, not his then fellow National Australia Bank executive Fahour, to be the CEO of NAB a decade ago.

The clutch of retail brokers to the float - the biggest in this market this year if it gets away - were at lunchtime asked to confirm that they could sell $330 million worth of shares to ‘mum and dad’ investors; an investor class that hasn’t historically done well buying into private equity backed ASX floats such as Latitude.

If those previous commitments for stock come back short and institutions cannot be convinced to increase their stock, there is a chance the high profile float could collapse.

Latitude’s vendors Deutsche Bank, Varde Partners and private equity giant KKR, not to mention Fahour and his band of Australia Post refugees, will hope to spared that humiliation.

Senior equity capital market bankers were believed to have been leaning heavily on key client relationships to secure extra commitments for Latitude stock to make up for any shortfall in what was previously expected from the already high retail component of the offer.

Float sources told Margin Call it was unlikely that Deutsche Bank, Varde Partners and private equity giant KKR would reprice Latitude’s shares below the $1.78 a share offer to just to get the float away.

That’s already a discount from the sale range of $2 to $2.25 a share in the company’s prospectus.

The Latitude IPO has significant implications for other floats seeking to raise capital and join the ASX ahead of Christmas, including the likes of Zoo Retail, the parent company of Boost Juice.

The unfolding scenario comes in stark contrast to this week’s stunning sharemarket debut of David Di PIlla’s HomeCo, whose stock is sitting comfortably above its $3.35 issue price.

On the strength of former UBS investment banker Di Pilla’s rich lister-heavy contact book, and associates of other wealthy billionaire foundation investors, HomeCo’s allocation of fresh capital was made almost entirely to wealthy family office investors.

No need - or rather opportunity - for poor Mums and Dads that time around.