New Zealand investors starved of new company listings would be drawn to the prospect of Vodafone New Zealand joining the stock exchange.
The local unit of British telecommunications carrier Vodafone Group is understood to be testing the waters for a planned initial public offering after last year's planned merger with Sky Network Television was rejected by the Commerce Commission on the grounds that such an entity would hold too much market power.
While no plans have been firmed up, the Australian Financial Review reported investment bank Deutsche Craigs will be running non-deal roadshows on both sides of the Tasman for a partial listing on the NZX and ASX to raise more than $1 billion.
Auckland-based Vodafone NZ was valued at $3.44b in the proposed tie-up with Sky TV using a multiple of 7.1 times projected underlying earnings before interest, tax, depreciation and amortisation of $481 million in the year ended June 30, 2017.
Vodafone NZ's accounts for 2017 March year show the company generated ebitda of $423.3m, although since then it's increased mobile and broadband customer numbers.
Grant Williamson, a director of Christchurch brokerage Hamilton Hindin Greene, said the "market has been crying out for equity IPOs" and if Vodafone NZ joined the NZX, the stock would be viewed as a "utility with a pretty large market share".
"At the end of the day, it comes down to pricing and making sure the balance sheet is not too complex and with pretty straight forward intercompany loans," Williamson said.
Investors will have dominant telco Spark to use as a benchmark for Vodafone NZ, with the NZX-listed firm recently trading at $3.92, a dividend yield of 6.5 per cent and price-to-earnings ratio of almost 17 times.