Viva fuels stockmarket
Viva Energy will start life on the stock market as a $4.86 billion company with owner Vitol retaining a 45 per cent stake in the fuel retailer and refinery owner.
VIVA Energy will start life on the stock market as a $4.86 billion company with owner Vitol retaining a 45 per cent stake in the fuel retailer and Geelong refinery owner.
Shares in Viva – the nation’s biggest float since health insurer Medibank was privatised – have been priced at $2.50, the bottom end of a price range initially sought.
Viva, which supplies Coles Express petrol stations and owns the Geelong refinery, will start life with a market value that would place it in the ASX 100 but trade at an earnings discount to key rival Caltex.
Owner Vitol Investment Partnership, an investor group headed by Swiss-based energy trading giant Vitol, has raised $2.65 billion by selling 55 per cent of a group of assets it bought from Shell in 2014.
Float managers Merrill Lynch, Deutsche Bank and UBS closed the book build on Wednesday.
Morningstar says “there is a lot to like about the Viva business” but warns its relationship with Coles and the rise of electric vehicles loom as risks.
The final price of the float will have Viva trade at 6.5 times its underlying earnings before interest, tax, depreciation and amortisation.
Key rival Caltex trades at about 7.5 times earnings.