Argo's new global infrastructure entity to raise up to $600 million in IPO
A new ASX-listed global infrastructure entity investing in airports, pipelines, toll roads, ports and telecommunications towers, established by the ultra-conservative listed investment company Argo Investments, is seeking to raise up to $600 million in an initial public offering.
The new Argo Global Listed Infrastructure entity will invest in a portfolio of 50 to 100 listed infrastructure securities worldwide. It lodged a prospectus on Monday with the Australian Securities and Investments Commission seeking to raise a minimum of $200 million and a maximum of $600 million, with a subscription price of $2 a share.
Airports will be one of the assets targeted by the new Argo Global Listed Infrastructure Ltd, which is seeking to raise up to $600 million in an IPO. AP
Argo Investments, the $5.3 billion listed investment company that has been in operation since 1946 and was once chaired by cricketing great Sir Donald Bradman, will subscribe for $25 million of shares in the new entity as part of the offer. Argo has about 75,000 shareholders, many of them retirees who rely on the steady flow of fully franked dividends to supplement their income. It is a rival to the listed Australian Foundation Investment Company.
Chairman Ian Martin said in a letter accompanying the prospectus that the new entity offers investors the opportunity to access a broad, diversified portfolio of global listed infrastructure securities.
The portfolio manager will be New York-based infrastructure manager Cohen & Steers. Mr Martin, a former chief executive of BT Financial Group, became chairman of Argo Investments in 2012.
Mr Martin will also chair the newly formed Argo Global Listed Infrastructure. Board members of the new entity include Jason Beddow, the managing director of Argo Investments, Joycelyn Morton, who is chairwoman of Thorn Group and is also a director of Argo Investments, Gary Simon, a former head of investments with ABN Amro Australia specialising in infrastructure investments, and Andrea Slattery, the chief executive of the Self-Managed Superannuation Fund Association.
There is a priority offer for existing shareholders in Argo Investments, with 75 million shares set aside for that component.
Mr Martin said the new company is seeking to raise a minium of $200 million and a maximum of $500 million, while there is also provision for an extra $100 million in oversubscriptions. Investors in the IPO will also receive attaching options on a one-for-one basis that are exercisable on or before March 31, 2017.
The company expects the investment portfolio will be unhedged.
Mr Martin reinforced that Cohen & Steers has a long track record in global listed infrastructure and as at March 31, 2015, had more than $70 billion of assets under management.
The new entity will invest in utilities including gas, electricity, renewable energy and water, transport infrastructure such as toll roads, railways, airports and marine ports, and in pipelines and telecommunications towers.
The offer opens on May 26 and closes on June 19. The new entity is aiming to list on the Australian Securities Exchange on July 3. Joint arrangers and lead managers are CBA Equities and Taylor Collison. Morgan Stanley, Morgans and Ord Minnett are also joint lead managers.
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