Thursday, September 23, 2010

QR National Share Offer

Is it worth buying shares in the QR National float?

That is the $6.5 billion question. Unfortunately, we're all going to have to wait a little longer to find out. Until October 10 to be exact. That's when the prospectus is due to be released.

Although details of the QR share offer are still sketchy, most main-stream media are predicting a market capitalization once the listing takes place to be around 6.5 billion dollars, although the Queensland Government may retain between 25% and 40% ownership. If you do the maths, that's still a sizeable opportunity for Australian investors. In fact this will be the largest float this year and the second largest in Australian history.

Pre-Registration Now Open For QR National Shares

Although the prospectus will not be released until October 10, Australian retail investors can now register their interest in the float. The main benefit of pre-registration seems to be a guaranteed minimum allocation of shares in the offer.

Retail investors also receive other benefits. According to the website we will receive a discount to what institional investors pay. We will have a maximum price (I guess the price paid by institutions will be set by some sort of book build process - kind of like an auction). There will be loyalty bonus shares on offer. This normally means you will receive some additional shares for free if you hold for a set minimum period. I think retail investors in Telstra received a similar deal.

As an added bonus, Queensland residents receive a priority allocation.

If you have any interest at all in the QR National Float, then it's probably worth pre-registering. It doesn't mean you need to take up the offer, but you will at least receive the minimum allocation if you do. You can pre-register at the QR National Share Offer website. Pre-registration closes on October 8.

Update: The prospectus has now been released. I have outlined some of the more interesting details in my latest post on the QR National Share Offer.