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Listing Brokers Say $2.50 Is Fair

Sydney Morning Herald

Wednesday June 28, 2000

By ANTHONY HUGHES

Brokers to the float of NRMA Insurance Group have clustered their official valuations for the company around the $2.50 per share mark, but some believe the shares could show early upside to more than $3.

The most bullish appears to be joint global co-ordinator, Macquarie Equities, with a mid-point valuation of $2.66.

Fellow joint global co-ordinator Credit Suisse First Boston is understood to hold a base valuation of $2.58 with an ``upside valuation" of $3.05, while UBS Warburg's estimate is $2.53.

These valuations are produced by the firm's research departments and few brokers independent of the float have yet to put forward their predictions.

Of the co-lead managers, J.B. Were & Son has a range of $2.40 to $2.70, Salomon Smith Barney $2.45 to $2.60 and Deutsche Bank $2.58 to $2.70.

The valuations coincide with last Sunday's long-awaited release of the NRMA prospectus.

The NRMA prospectus sets a range of $2.25 to $2.75 for the purposes of the institutional book-build and a facility that will enable members to cash in their shares prior to the listing. They can also hold the shares and buy up to another $500 worth but there is no general public offer.

The remaining hurdle is a court action by rebel director Mr Richard Talbot, whose case that the NRMA indemnify his costs for contesting the demutualisation was referred yesterday to the Supreme Court of NSW's equity division.

NRMA members are taking a low-key approach so far to the insurance group's impending listing with relatively few calls to the group's member hotline.

The hotline is understood to have received about 3,000 calls a day since the prospectus was launched.

© 2000 Sydney Morning Herald

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