* Collins Foods would be largest local IPO this year
* Shares priced at 9-10.5 times 2012 earnings
* Final decision on float will depend on investor feedback
* Two other floats pulled in recent weeks
MELBOURNE, July 5 Australian fast-food group
Collins Foods, owned by private equity firm Pacific Equity
Partners, plans to raise up to A$238 million ($255 million) in
an initial share offering, two sources said, which would make it
the largest IPO in the local market this year.
There has been a drought in Australian share offerings due
to soft equity markets, with two floats pulled last month and no
IPOs worth more than A$100 million reaching the market.
Collins Foods will offer 81.6 million shares at a price
range between A$2.50 to A$2.92, the two sources told Reuters.
They spoke on condition of anonymity because the matter is not
The price range implies a multiple of between 9 and 10.5
times 2012 earnings, they said.
A decision on whether to lodge a prospectus would be made
later this month, one of the sources said.
A spokeswoman for PEP could not immediately comment.
Collins manages all 119 KFC outlets in the state of
Queensland and 26 Sizzler restaurants around Australia, and
operates or franchises more than 260 Sizzlers worldwide,
according to its web site.
The decision to pursue an IPO was prompted by the successful
sale earlier last month of a larger rival fast-food chain,
Quadrant Private Equity's Quick Service Restaurants to Archer
Capital for A$450 million. Quadrant made a threefold return for
investors on that deal. For details, see
Deutsche Bank (DBKGn.DE) and UBS are joint lead
managers for the Collins float.
The sources said the float was not yet set in stone and
would depend on the response from institutional investors and
the state of equity markets.
Last week, underground mining services company Barminco
pulled its A$545 million ($574.3 million) initial public
offering, saying it would wait for more stable market
And earlier in June, poor demand saw fund manager 360
Capital defer an IPO worth about A$330 million for an industrial
(Reporting by Victoria Thieberger; Editing by Balazs Koranyi)