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UPDATE 1-Australia's Collins Foods to brave market with $255 mln IPO
July 5, 2011 / 12:36 AM / 6 years ago

UPDATE 1-Australia's Collins Foods to brave market with $255 mln IPO

* 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 (Adds details)

MELBOURNE, July 5 (Reuters) - 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 public yet.

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 conditions.

And earlier in June, poor demand saw fund manager 360 Capital defer an IPO worth about A$330 million for an industrial trust. (Reporting by Victoria Thieberger; Editing by Balazs Koranyi)

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