Virgin Australia gets $685 million IPO ready for take-off

The Age

2 days ago

Virgin Australia has kicked off its return to the Australian sharemarket after an absence of more than four years, with bankers offering shares in the airline to investors at $2.90 apiece for its much-anticipated re-listing on the ASX.
Looking past the recent market turmoil, private equity owner Bain Capital will sell about 30 per cent of Qantas' biggest rival, expecting to raise $685 million via the initial public offering, which would value the company at close to $2.3 billion.
The $2.90 price tag for the stock represents a multiple of seven times the airline's expected earnings this financial year, the bankers handling the sale said in their pitch to investors. That's cheaper than Qantas shares, which trade at around 10 times expected earnings for the same period.
Sources close to the joint lead managers of the offering - Goldman Sachs, UBS and Barrenjoey - said demand from domestic and global anchor investors was 'well in excess of the offer size prior to opening of the bookbuild'.
The IPO represents the culmination of years of waiting for the re-listing of the airline. Bain Capital bought the then struggling carrier in 2020, taking it off the sharemarket after it had been placed in administration, facing soaring costs and the impact of the COVID-19 shutdown on travel.
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In October, Bain sold 25 per cent of Virgin to Qatar Airways. Under their agreement, Virgin will begin offering expanded international flights using Qatar planes and crews to fly from capital cities to Doha later this month.
The listing comes at an interesting time for sharemarkets, with billions of dollars' worth of acquisitions and IPOs worldwide put on hold globally as Donald Trump's trade war has rocked markets. However, the ASX has surged 15 per cent from its tariff shock low in April, opening a window for Bain to push through Virgin's long-awaited return to the exchange. Qantas stock is at a record high.
Jun Bei Liu, a fund manager at Sydney-based investment firm Ten Cap, said Virgin has been priced attractively. 'We do think that with this pricing the IPO will perform very well,' she said.