Goldman Sachs made its mark in Australasian equities in 2014 with leading roles on Australia’s largest IPO, rights issue, institutional placement and block trade.
The bank has honed its local platform and made multiple personnel changes since taking full control of its JB Were joint venture in 2011, and those investments paid off in a year when Australian equity raising continued to rebound, while IPOs gathered pace. Notably, Goldman used its ability to take risk to lure top-tier clients away from its main competitors.
Toll-road operator Transurban Group’s A$2.34bn (US$2.0bn) entitlement offer underlined Goldman’s ability to put its balance sheet on the line for the right deal, and the right client. The bank signed a nerve-inducing 30-day hard underwriting agreement with very limited termination events, ensuring that Transurban would have the money it needed to acquire Queensland Motorways under any circumstances, without requiring a bridge facility.
Goldman and another bookrunner, originally pitched the 10-for-43 offer at a 6%–8% discount to Transurban’s TERP, and managed to price the deal tighter at a final discount of 5.8%. In June, Goldman underwrote another jumbo deal after beating three other rivals in a competitive bid. Together with one other bank, Goldman underwrote Royal Dutch Shell’s A$3.24bn block sale in oil-and-gas exploration company Woodside Petroleum, the largest secondary block trade in Asia since December 2012.
A sole-led A$650m equity placement for QBE Insurance Group also demonstrated how Goldman could tailor-make capital market solutions for clients in accordance with their developments.
QBE needed a comprehensive capital plan in August to improve its financial flexibility, and Goldman used an innovative capped bookbuilding process to allow existing shareholders to avoid dilution.
Investors willing to bid at the top of the A$9.85–$10.10 price range were guaranteed at least their pro-rata allocations. That strategy helped the placement price at the top, and squeezed out hedge funds that just wanted to flip the stock. QBE’s stock rose 5.6% the day after the placement.
Goldman was also joint bookrunner on the A$2.3bn IPO of Healthscope, Australia’s second largest private hospital operator. That was the country’s largest new listing under IFR’s review period, although Medibank Private, another Goldman mandate, will take that title for the calendar year.
In New Zealand, Goldman helped the government raise NZ$365m (US$289m) through the sale of a 20% stake in Air New Zealand in November 2013. It also solely arranged Commonwealth Bank of Australia’s NZ$92m selldown in Kiwi Income Property Trust in January.
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