Turners Auction debut wildly successful

By NZPA

Friday 4th October 2002

Turners Auction had a wildly successful debut on the sharemarket today, with the stock trading at more than a 50 percent premium to its offer price.

Trading in the four million shares was going "gangbusters", according to one broker, as they swiftly rose above the opening price of $2.15 to $2.39.

The car auctioneers offered the shares at $1.50 each in a $6 million capital raising.

Within the first hour, almost 400,000 shares changed hands.

The market appeared to be breathing a sigh of relief following two underwhelming floats this year -- plastics packaging business Vertex, which listed at a 5 percent discount, and agricultural equipment manufacturer Skellmax Industries, which has dipped 17 percent from its issue price of $1.15.

However, the stock was too small and tightly held to be covered by many brokers.

British-based investment company Guinness Peat Group has retained a 38.8 percent stake through its subsidiary Ithaca, according to a substantial shareholder notice filed with the stock exchange this morning.

GPG signalled prior to the debut that its holding would slip from 45.7 percent to 38.8 percent. Bartel Holdings, a company ultimately owned by Ecuador's Alvaro Noboa family, the people behind Bonita bananas, has seen its stake drop to 21.9 percent from 25.8 percent.

It is unusual for shares to debut at such a large premium, with most successful floats achieving a rise of about 10 to 15 percent.

GPG New Zealand director Tony Gibbs was overseas, but he admitted last month that the stock had probably been priced "miles too cheap".

There was no public pool of shares, with lead manager JB Were issuing shares to brokers and institutions.

Turners Auctions, the country's largest car auctioneer, was split off from the produce marketer -- and intended Enza merger partner -- Turners & Growers in April.

According to the prospectus, investors could expect rises of 15 percent in operating revenue to $70.7 million, and 12.6 percent in earnings before interest, tax, depreciation and amortisation to $9.6 million.

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