Loyal Alinta customers will be given bonus shares as part of the gas utility’s $4 billion re-float, which kicks off with the lodgement of a prospectus tomorrow.
It is believed that customers who buy shares through Alinta’s retail offer will receive one bonus share, up to a limit of 600, for every 15 shares purchased, if they remain customers and retain their stock for 12 months after next month’s listing.
The offer is aimed at meeting the competitive threat posed by Wesfarmers’ Kleenheat business, which has won 15 per cent of the WA gas market in the past four years, and new entrants AGL and Origin Energy.
Alinta’s near 600,000 customers have so far shown only modest interest in the early promotion of the initial public offer, the biggest to target WA investors since the group was floated as AlintaGas by the WA government in 2000.
About 15,000 customers took up the offer promoted by a mail drop and newspaper advertisements to pre-register for Alinta’s prospectus by last Thursday’s deadline.
The company has not disclosed what level of registrations had been expected, but suggested it was comfortable with the result.
The “pre-registration” is simply an early expression of investment interest and does not preclude other customers from requesting a prospectus when it hits the market.
As a comparison, 83,000 customers registered for the AlintaGas float. Demand there, however, was influenced by the promise of a priority allocation of shares and a publicity blitz.
Alinta is being sold by its shareholders, led by US private equity giant TPG, after a drawn-out process that has been delayed at least twice.
The offer is expected to raise at least $1 billion, with research by the float’s sponsoring brokers valuing Alinta at between 8.4 times and 10 times earnings, or $3.5 billion to $4 billion.
Though based in Sydney, Alinta is anchored by WA, where its regulated business has 590,000 gas and 4000 electricity customers. There is also a gas-powered electricity-generation arm in the Pilbara.
Named after an Aboriginal word for fire or flame, its listed predecessor was put on the market in 2007 after a controversial and failed management buyout.
It was eventually sold to a consortium of Babcock & Brown and Singapore Power via a complex $15.126-a-share offer.