Hirepool share offer pulled

Last updated 05:00 25/06/2014

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The float of equipment hire firm Hirepool has been withdrawn after investors baulked at the price.

In an email to brokers, joint lead manager Deutsche Craigs said Hirepool's private equity owner Next Capital had withdrawn the proposed initial public share offer (IPO).

A media statement said: "Given the strength of the New Zealand economy and the positive outlook for Hirepool, Next Capital Pty Limited on behalf of the Next Capital Funds, have determined that they are comfortable retaining control of the Hirepool business."

Forsyth Barr managing director Neil Paviour-Smith, whose firm was not part of the IPO process, said Next had simply asked too much for the shares.

"We think Hirepool is a good company," he said.

"The issue was just the pricing of the offer and we didn't have a lot of interest at the indicative price range."

However, the float's failure was not a sign of IPO fatigue, he said.

"There's a lot of investable funds out there. But if you're in a fine restaurant with a menu of choices you are going to be more discerning."

Hirepool had aimed to raise $175 million to $262m in a share offer that would leave Next with 65 per cent to 80 per cent of the company.

Final pricing on the IPO was to be set yesterday in a bookbuild of institutions and retail brokers.

One fund manager who was involved in the price negotiation said "it was just a matter of price for what were viewed as cyclical assets". While Hirepool would benefit from a strong economy boosting construction activity, it could suffer disproportionately in a downswing, he said.

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