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2000
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1999
Hold That Hype
Newcastle Herald
Thursday April 20, 2000
THE NRMA is confident public listing of its insurance arm will proceed no matter what sharemarket conditions are but has vowed it will not `overhype' the shares.
Barring more legal challenges and a court hearing next month, it is poised to put up a prospectus in May, ahead of listing on the Australian Stock Exchange in July.
NRMA chief executive Eric Dodd said poor sharemarket conditions might help the 2million members/shareholders.
He is keen to avoid a repeat of AMP's demutualisation and sharemarket listing in 1998, when some investors paid almost double the starting price in a frenetic day of trading then watched the share price dwindle in the ensuing days and months.
That frenzy was caused in part by a lack of available shares for professional investors.
Professional investors, such as AMP and BT, will receive at least 8% of NRMA before listing and possibly more, depending on how many NRMA shareholders take cash instead of holding shares at the listing.
But it is still estimated that demand from these institutions will be many times the estimated $1billion in shares that will be on offer to them, or about 20% of the total number issued.
Stockbrokers have valued NRMA on listing at as high as $5.1billion or $3.42 a share.
This figure is based on assumptions that NRMA will attract as good a rating as established general insurers such as QBE Insurance.
It would mean NRMA members could obtain an extra windfall, above the independent valuation of $2.60 to $3 range provided in the information memorandum for yesterday's meeting.
© 2000 Newcastle Herald