Healthy interest : share price tipped to soar as investors swamp upcoming float.
Promises of preferential treatment for early and aggressive bidders in the Medibank Private $4.3 billion-plus float will be worthless said fund managers as local investors flocked to the first day of the share auction for institutions.
In an attempt to push up the price at which they can sell stock in the institutional book build, which kicked off at 7am on Tuesday, the government and adviser Lazard outlined ground rules for share allocations.
Fund managers were told that firm bids made in the first 24 hours of the bookbuild that came at above the final price, and early bids above the upper end of the indicative price range of $1.55 to $2.00, would be given preferential treatment.
As a result, fear of missing out (or #fomo as the internet kids call it) has swept through the investment community. “I don’t think there will be any preference given because I think everyone is in there,” one fund manager said, describing the bookbuild as a “bidding frenzy”.