February 14, 2013
BOB Ingham is considering a $1?billion float for his chicken producer, Inghams Enterprises, as a sharemarket rally stokes hopes of recovery in initial public offerings. It is understood Mr Ingham’s long-time corporate adviser, Investec Australia, wrote to investment banks asking for a view on how a potential IPO might work. The letter invited banks to pitch in the next fortnight for a joint lead manager role for the float. A listing is being considered even as Mr Ingham and his advisers continue negotiations with four prospective buyers for a private sale of the 94-year-old family company which sells one in every three chickens in Australia, The Australian Financial Review reports. The sale process faltered towards the end of last year, with global private equity group Blackstone and Chinese agribusiness giant New Hope believed to have withdrawn from the auction. Sources said Mr Ingham, who is seeking more than $1 billion for the business, knocked back what he believed to be low offers from both parties. However, Blackstone and New Hope are understood to be back in negotiations. New Hope is one of the largest agribusiness enterprises in China and is being advised by Deloitte Corporate Finance and King & Wood Mallesons. Blackstone is represented in Australia by James Carnegie and is being advised by Barclays Capital. Mr Ingham and his advisers are hopeful that running an IPO process alongside the auction will help extract the right price. The float idea was pitched by investment banks hopeful that an equities rally will finally reopen the IPO market after local float volumes last year fell to their lowest since 2001. Private equity firm Affinity Equity Partners – which bought New Zealand poultry business Tegel Foods in 2010 – and TPG are also believed to be interested. Inghams has an annual turnover of more than $2 billion and, with rival Baiada, controls close to 70 per cent of the chicken-meat market in Australia. Forecast earnings before interest, tax, depreciation and amortisation for Inghams is $210 million for the 2013 financial year. Mr Ingham and his late brother Jack built up the backyard business started by their father. Mr Ingham became the sole shareholder after Jack died in 2003. With none of his four adult children or close family members working at the company, Mr Ingham has decided to sell it. A spokeswoman declined to comment.