MIDDAY UPDATE: Super-stag Fonterra units up 22% in NZX debut

By Paul McBeth

Nov. 30 (BusinessDesk) - Units in the Fonterra Shareholders' Fund have given investors a good old-fashioned listing "stag", jumping as much as 22 percent to $6.71 in their debut on the stock exchange as investors leapt at the opportunity to grab exposure to the dairy exporter's earnings.

The units, priced at $5.50 during the bookbuild earlier this year, opened at $6.66, rising to $6.71 in 10 minutes of trading with 5.9 million units, or 6.1 percent of the fund, changing hands.

"Today we have permanent capital based on a true market price," said Fonterra chief executive Theo Spierings."We have seen that true market price just now."

The fund gives unit holders access to Fonterra's dividend stream, without granting any voting rights. The change will substantially reduce the share redemption risk on Fonterra’s own books, which has billowed to more than $700 million in recent years, by giving farmers a venue to trade the shares among themselves.

Some 58 percent of the units were allocated to New Zealand retail and institutional investors and the class of investors known as Friends of Fonterra, which includes Australia's Bonlac. The rest were sold to foreign institutions.

Xero gets $60 mln in new capital from American investors

Cloud accounting software maker Xero has got $60 million in fresh capital from Peter Thiel's Valar Ventures and Massachusetts-based Matrix Capital to help the Wellington-based firm ramp up its investment programme.

The two American firms spent $82 million between them, buying $22 million from Xero's three biggest shareholders Rod Drury, Craig Winkler and Hamish Edward, and were issued 10 million shares at $6 apiece. That's a 7.7 percent discount to the current trading price of $6.50.

As a result of the injection, Matrix will hold 9.8 percent of Xero and Valar will have 7 percent.

Loizos Michaels found guilty of fraud

After an eight-week trial in the Auckland District Court, businessman Loizos Michaels has been found guilty of 31 charges of fraud and faces up to seven years in jail.

The Serious Fraud Office looked at $3 million of dodgy investments put up by Michaels, included a claim he was heading a Macau-based takeover bid for SkyCity Entertainment Group.

"While Mr Michaels’ case is highly colourful, it would be a mistake to assume that it is representative of the majority of financial crime," SFO acting chief Simon McArley said.

(BusinessDesk)

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