* Biggest Australian float in 4 yrs trades at 9 pct premium
* Confirms Australian IPO market is healthy
* Bodes well for Healthscope and Medibank floats
(Adds broker comment, background)
By Byron Kaye
SYDNEY, May 23 Shares in Australian industrial
services company Spotless Group Ltd debuted at a nine
percent premium to their offer price on Friday, raising hopes
the country's IPO market is emerging from years of sluggish
A strong start for Australia's biggest float in almost four
years - with about A$1 billion ($923.50 million) worth of stock
on issue - will encourage other private equity firms considering
even larger listings, such as that of TPG and Carlyle
owned healthcare provider Healthscope.
It is also likely to encourage the Australian government
which has said it plans to float state-owned health insurer
Medibank Private in a listing expected to fetch A$4 billion.
Investors traded the shares at A$1.75 at 02.00 GMT, well
above the issue price of A$1.60. The shares fell back to A$1.72
by 02.18 GMT.
Australian private equity firm Pacific Equity Partners took
Melbourne-based Spotless private in August 2012 after buying it
for A$723 million. After the float, the company had a market
capitalisation of A$1.9 billion.
"It listed at the bottom of its range so that could be one
reason" for the strong debut, Lonsec senior client adviser
Michael Heffernan said.
"They're looking for something that's got a bit of grunt to
it and is not priced over the odds."
Australia's IPO market is heating up as the sharemarket
trades around record levels following five years of erratic
Shares in the company with the No. 2 Australian float of the
year behind Spotless, mortgage insurer Genworth Mortgage
Insurance Australia Ltd, were trading at A$2.94 on
Friday, compared with their A$2.65 issue price, having listed on
Not including the A$1.5 billion raised by Spotless and
Genworth in the past week, IPO issuance in Australia since the
beginning of the year has more than doubled to $1.2 billion over
the same period in 2013, according to Thomson Reuters data.
Companies raised $6 billion from new listings in 2013, the best
year since 2010.
Just 21 months since it bought Spotless following a bitter
takeover battle, PEP says it has restructured the business so
that it will triple earnings by 2015 by stripping overheads and
selling underperforming divisions.
($1 = 1.0828 Australian Dollars)
(Reporting by Byron Kaye; Editing by Stephen Coates)