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Viva Energy IPO priced at $2.50 a share

Sonali Paul

The float of Viva Energy, led by global energy trader Vitol, has been priced at the bottom end of the bidding range, valuing the oil refiner and marketer at $4.86 billion, according to two fund managers.

The initial public offering, Australia's biggest in nearly four years, was priced at $2.50 a share after institutional investors had been asked to bid within a range of $2.50 and A$2.65 a share.

Viva is likely to announce the pricing and how much of a stake the Vitol-led partnership will retain upon listing on Thursday.

Fund managers who took part in the Viva IPO said it was reasonably priced and appeared to have received good demand.

"It's a good company. The industry dynamics are favourable and it's run by a capable management team," said an analyst with a Sydney-based fund manager.

Viva Energy was built from Royal Dutch Shell's former refinery in Geelong, near Melbourne and a network of around 1,165 petrol stations in Australia, which Vitol bought for $2.6 billion in 2014.

Vitol and its unnamed partners have since spent over $1 billion improving the business, including buying Shell's jet fuel operations in Australia, and are now looking to cash in.